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ACC and Ambuja Cements pass vote to pay Holcim fee

World Cement,

Shares in Holcim-owned ACC and Ambuja Cements have increased in value today after the companies won investor approval to pay a ‘technology and know-how’ fee amounting to 1% of net sales to Holcim Technology. The agreement will last for two years, beginning this year.

The vote was not necessary, but was decided upon as good corporate governance, since the fee was unpopular with some shareholders. A number of proxy advisory firms had encouraged minority shareholders to oppose the resolution, claiming there was no justification for how the fee amount was arrived at. Additionally, the high stake that Holcim holds in both companies – over 50% - obviously works in favour of the proposal. The advisory firms suggested that the vote should be decided on the majority of the minority shareholders.

The fee covers the added value that Holcim brings to ACC and Ambuja Cements in terms of manufacturing excellence, commercial value, training and personnel development, the sharing of expertise, environmental knowhow and safety practices. It had previously been set at 0.6 – 0.7% of net sales.

At ACC the vote was passed with over 75% of members voting in favour, and at Ambuja 71.84% of shareholders were in favour.

Edited from various sources by Katherine Guenioui.

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