Holcim to invest $1.34 bn to take control of Ambuja Cement

With this, Holcim’s holding in ACL will go up to over 56 per cent after a mandatory open offer, reports Lalatendu Mishra.

Holcim, the world’s second-largest cement company, is set to take majority control in Ambuja Cements Ltd (ACL) by offering to invest $1.34 billion, or Rs 5,497 crore, to acquire an additional 24 per cent stake in the Indian cement major.

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With this, Holcim’s holding in ACL, India’s fourth largest cement maker, would go up to over 56 per cent after a mandatory open offer.

Former Ambuja Cements MD Anil Singhvi said, “This is on expected lines and is in sync with Holcim’s global strategy to have absolute control on cement companies it invests. This is a step will benefit Holcim and its shareholders in the long run.”

Holcim has a controlling stake in almost all companies located across the world. Analysts feel that Holcim, which controls 41 per cent in ACC, may look at the possibility of creating a mega-cement major at a later date by merging ACC with Ambuja Cements, thus creating a mega cement company with a capacity of 39 million tonnes.

On Wednesday, Holcim announced that it had acquired an additional 3.9 per cent stake from the original promoters — the Neotia and Sekhsaria families — for $ 220 million (Rs 902 crore), at Rs 154 per share, an 18 per cent premium on the closing price of ACL shares on Wednesday.

With this Holcim has invoked SEBI’s open offer clause to acquire an additional 20 per cent shares from the market. For this, Holcim will offer Rs 154 per share. On April 23, Holcim bought 1.8 per cent stake in ACL from Austrian investment bank Meinl Bank Aktiengesellschaft, exceeding the 5 per cent bulk share acquisition limit in a year.

Holcim has said the original promoter families would continue to hold a stake in ACL. “Suresh Neotia will continue as Chairman and Narotam Sekhsaria as Vice Chairman on the Board of Directors of ACL,” the statement said. Holcim expects to conclude the transaction by November.