Ambuja Cements Approves Merger with ACC and Orient Cement

A Major Consolidation in India's Cement Sector

Ambuja Cements Limited, a key entity within the Adani Group, has received board approval for two separate schemes of amalgamation to merge with ACC Limited and Orient Cement Limited. This strategic move aims to establish a single, consolidated 'One Cement Platform', creating a powerhouse in the Indian cement industry. The decision marks a significant step in the Adani Group's strategy to build an integrated and globally competitive building materials organization.

This consolidation is designed to create a stronger entity with greater scale, improved efficiencies, and robust financial strength. The transaction is subject to necessary regulatory and statutory approvals and is expected to be completed within the next year.

The Strategic Vision Behind the Merger

Karan Adani, Non-Executive Director of Ambuja Cements, described the consolidation as a transformational step. He stated, "By bringing Ambuja Cements, ACC, and Orient Cement under a single corporate structure, we are strengthening our ability to drive operational excellence, accelerate growth, and deliver sustainable long-term value." The merger is expected to build on the group's proven track record of driving efficiency and productivity. A resilient, debt-free balance sheet will position the unified entity to effectively support future growth initiatives and adapt quickly to market demands.

The primary goal is to unlock significant operational and financial synergies. The company anticipates that optimizing manufacturing and logistics networks, streamlining the corporate structure, and enabling more efficient capital allocation will be key outcomes. These improvements are projected to boost profitability, support capacity expansion, and enhance long-term returns for shareholders.

Share Swap Ratios for Shareholders

The board has approved specific share exchange ratios for the amalgamation. For shareholders of ACC Limited, Ambuja Cements will issue 328 equity shares (with a face value of ₹2 each) for every 100 equity shares held in ACC (with a face value of ₹10 each). For shareholders of Orient Cement Limited, Ambuja Cements will issue 33 equity shares (with a face value of ₹2 each) for every 100 equity shares held in Orient Cement (with a face value of ₹1 each).

This structure offers shareholders of the merging companies direct participation in a larger, more agile, and future-ready leader in the cement industry. All assets, liabilities, and subsidiaries of ACC and Orient Cement will be transferred to Ambuja Cements upon completion.

Expected Financial and Operational Gains

The merger is projected to deliver significant cost savings and margin improvements. Ambuja Cements expects to optimize costs and improve margins by at least ₹100 per metric tonne (PMT) by simplifying and rationalizing its network, branding, and sales promotion expenditures. The amalgamation eliminates structural duplication, reduces administrative overheads, and facilitates faster, more agile decision-making.

Furthermore, the unified structure will remove the need for specific Master Service Agreements (MSAs) with ACC, Orient, Penna, and Sanghi, as these subsidiaries will become integral parts of Ambuja Cements. This simplification is a core part of the strategy to enhance operational flow and reduce complexity.

Financial Snapshot of Involved Entities

A look at the financials as of March 31, 2025, highlights the scale of the combined entity:

Aligning with Future Growth Plans

This consolidation directly supports Ambuja Cements' strategic plan to increase its cement production capacity from the current 107 million tonnes per annum (MTPA) to 155 MTPA by the fiscal year 2028. The efficient capital allocation facilitated by the merger will be crucial in achieving this ambitious target. The company has also noted that the Schemes of Amalgamation for Sanghi Industries and Penna Cement are at different stages of approval, indicating a broader consolidation strategy is underway.

Brand Continuity and Market Position

Despite the corporate restructuring, the company has confirmed that the established and trusted brands of 'Adani Ambuja Cements' and 'Adani ACC' will continue to operate as usual in their respective markets. The merger brings two of India's most recognized cement brands under one unified structure, strengthening their market leadership without disrupting their brand identity. The merged entity will also benefit from a consolidated ESG framework, accelerating the adoption of renewable energy and sustainable practices across the board.

Conclusion: A Unified Path Forward

The approval of these mergers by the Ambuja Cements board is a pivotal moment for the company and the Indian cement sector. By creating a single, powerful platform, the Adani Group aims to unlock substantial value through synergies, cost efficiencies, and a simplified corporate structure. As the company awaits regulatory approvals over the next year, stakeholders will be watching closely as this new cement powerhouse takes shape, poised for significant growth and enhanced market leadership.