Ambuja Cements, Orient Cement, ACC merger: Here’s how shares are faring on Wednesday; check what analysts said

The board of Ambuja Cements Ltd (ACL) on Monday approved the scheme of amalgamation of merging ACC and Orient Cement.

Most analysts have welcomed the merger news; however, a few of them note that the share swap ratios are neutral for ACC minority shareholders and positive for Orient minority shareholders.

Here are some analysts’ views on the merger:

HSBC analysts noted that management expects operational synergies from the merger to generate cost savings of at least ₹100 per tonne and views the amalgamation as a positive development.

Further, in a note on Wednesday, analysts from Macquarie said the merger of cement subsidiaries will help simplify Ambuja’s corporate structure, with cost optimisation remaining a key focus area. It highlighted that approvals from ACC shareholders and effective brand management—especially for ACC, which is among the strongest cement brands across several markets—will be critical to watch.

They also flagged risks like weaker-than-expected cement demand, delays in Ambuja’s expansion plans, and continued pricing pressure due to intense competition in the sector.

Meanwhile, Citi noted that the transaction valuation implies a 1% discount to ACC’s closing price on December 22 and a 9% premium for Orient Cement. Citi added that Ambuja’s targeted ₹100 per tonne EBITDA improvement from the merger is already included in its broader ₹500 per tonne cost reduction goal by FY28.

While both Ambuja and ACC brands will continue to operate independently, the merger may help reduce investor confusion, although the brokerage believes it may not materially alter the overall investment narrative since the two companies already operate closely, analysts from Citi said.

Rationale behind merger

"The merger will unlock greater operational efficiencies, optimise manufacturing and logistics, and enable efficient capital deployment. These improvements will boost profitability, support capacity expansion, and enhance long-term shareholder returns," said ACL in a statement.

What shareholders should know

As per the proposed scheme of arrangement, Ambuja Cements will issue new equity shares to the shareholders of ACC and Orient Cement based on the prescribed swap ratios.

For every 100 equity shares of ACC (face value ₹10 each), eligible ACC shareholders will receive 328 equity shares of Ambuja Cements with a face value of ₹2 each.

Similarly, for every 100 equity shares of Orient Cement (face value ₹1 each), eligible Orient Cement shareholders will be allotted 33 equity shares of Ambuja Cements, each with a face value of ₹2.

Here’s how Ambuja Cements, ACC and Orient Cement shares are faring

On Wednesday, Ambuja Cements and Orient Cement shares were trading with gains, while ACC shares lagged.

Ambuja Cements shares rose 1.18% to hit an intraday high of ₹553.40 apiece. Last seen, it was trading at ₹551 per share on NSE, rising 0.75%.

On the other hand, ACC shares were seen lower. At 12:02 PM, the stock was trading at ₹1,742.80 per share, falling 0.65%.