ACC, Ambuja Cements not to merge

The board of ACC has decided to not go ahead with the proposed merger with Ambuja Cements Limited (ACL) for now.

The ACC Limited is India's foremost manufacturer of cement and ready-mixed concrete with 17 modern cement factories, more than 57 ready-mixed concrete plants, a vast distribution network of over 10,000 dealers and a countrywide spread of sales offices.

In May 2017, LafargeHolcim, the Ultimate Holding Company of both ACC and Ambuja Cements proposed a merger of the two companies to gain competitive advantage and reduce duplication of costs. The Indian brand Ambuja Cements owns 50.05 per cent stake in ACC, while promoter group company Holderind Investments Limited, Mauritius owns 4.48 per cent. On the other hand, Holderind holds 63.62 per cent stake in Ambuja Cements.

The special committee appointed to evaluate the merge cited the issue of limitation in transferring mining right in around 18 to 29 states has the major reason for calling off the merger, as of now. However, the companies clarified that merger remains the ultimate objective.

ACC and Ambuja will cooperate to achieve synergies and will have arrangements for mutual purchase, and sale of materials and services.

At lunch, the stock of ACC was trading at Rs. 1,633.75 per share, down by 1.78%, while Ambuja Cements was trading at Rs. 251.20 per share, down 4.23 per cent on Tuesday. The benchmark index BSE Sensex was at 34,345.37, down 100.38 points or 0.29 per cent.