The world’s number two cement manufacturer — Holcim Ltd — has decided to acquire India’s most profitable cement company, Gujarat Ambuja Cement, for a total consideration of Rs 4,532 crore.
On Monday, the Swiss major acquired 20 crore equity shares of Gujarat Ambuja Cement constituting 14.8 per cent of the paid-up capital for Rs 2,100 crore at the rate of Rs 105 per equity share, this includes a non-competing fee of Rs 15 per share from the existing promoters, Sekhsarias and Neotias. The MNC cement major will make an open offer for acquiring an additional 20 per cent equity of the company from the open market at Rs 90 per share.
For this, Holcim will have to fork out an additional Rs 2,432 crore for the open offer. Following the completion of the open offer, Holcim's stake in the company will increase to 34.8 per cent. And the total cost of acquisition will be Rs 4,532 crore, a little over $1 billion.
After the divestment of 14.8 per cent stake, the existing promoters’ stake will come down to approximately nine per cent. The founders, Sekhsarias and Neotias, were holding 23.8 per cent of Gujarat Ambuja before the sale. Post closure of the open offer, Holcim will nominate three directors on the board of the company. As part of the change in the management structure following change in the ownership, Narottam S. Sekhsaria, founder, promoter and managing director of the company, was elected as non-executive vice-chairman. Anil Singhvi was appointed as the managing director by the board. V.K. Neotia (non-executive director), Harshvardhan Neotia (non-executive director) and Pulkit Sekhsaria (wholetime director) have resigned as directors of the company.
{{/usCountry}}After the divestment of 14.8 per cent stake, the existing promoters’ stake will come down to approximately nine per cent. The founders, Sekhsarias and Neotias, were holding 23.8 per cent of Gujarat Ambuja before the sale. Post closure of the open offer, Holcim will nominate three directors on the board of the company. As part of the change in the management structure following change in the ownership, Narottam S. Sekhsaria, founder, promoter and managing director of the company, was elected as non-executive vice-chairman. Anil Singhvi was appointed as the managing director by the board. V.K. Neotia (non-executive director), Harshvardhan Neotia (non-executive director) and Pulkit Sekhsaria (wholetime director) have resigned as directors of the company.
{{/usCountry}}Holcim already controls 34 per cent of Associated Cement Companies Ltd (ACC), India’s number two cement producer, through its holding in a Gujarat Ambuja group firm which it acquired in early 2005. Holcim had bought 67 per cent of Ambuja Cement India, which owns 34 per cent of ACC and 97 per cent of Ambuja Cement Eastern Ltd.
India’s cement industry has an annual production capacity of 152 million tonnes. Work is underway to add nearly 25 million tonnes over the next three years to meet demand that is rising at 10 per cent a year.
After gaining control over Gujarat Ambuja, Holcim will have control over almost 33 million tonnes.
There is every possibility that the Swiss MNC would like to consolidate its holding further in the Indian market, say experts. The Aditya Birla group companies Grasim and Ultratech together have a capacity of approximately 32 mt.