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Holcim restructuring will see Ambuja acquire ACC stake

World Cement,

Holcim has announced plans to streamline its organisational structure in India. Through intragroup restructuring, Holcim India Private Ltd (HIPL) will merge with Ambuja Cements, which will therefore acquire Holcim’s stake in ACC. Both Ambuja and ACC will continue to operate as separate entities as they have done to date, but the restructuring will enable closer back-end cooperation and will simplify the group structure.

In the current set-up, HIPL, a 100% Holcim-owned subsidiary, owns just 9.76% of Ambuja Cements but 50.01% in ACC. Holcim, meanwhile, owns a 40.79% stake in Ambuja and 0.29% in ACC. Under the simplified structure, given the details of the merger, Holcim’s stake in Ambuja will increase to 61.39% (subject to shareholder and regulatory approvals in India) and Ambuja will own a 50.01% stake in ACC. Further details of the transaction can be found here.

In the same announcement, Holcim confirmed it will go ahead with the 4.5 million tpa Marwar Mundwa expansion project and that it is evaluating further brown and greenfield opportunities to optimise its group structure in the country.

“This transaction further improves Holcim’s holding structure in India, strengthens the platform for future growth and is expected to generate synergy benefits of Rs.9000 million (US$150 million) per annum. These benefits, which will be realized in a phased manner over two years, will be shared by both companies equally through supply chain, shared services and fixed costs optimization. The transaction is expected to be neutral on Holcim’s EPS in the first full year following the completion of the transaction and accretive thereafter”, says CEO Bernard Fontana.

Adapted from press release by Katherine Guenioui.

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