Ambuja Cements, the cement behemoth, set to become bigger as it merges ACC and Orient Cement: Key FAQs answered

Post-merger of the subsidiaries – ACC Ltd, Orient Cement, Penna Cement, and Sanghi Industries – "will become an integral part of Ambuja" with a capacity of 107 million tonnes per annum.

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

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

• According to the scheme, for every 100 equity shares of ACC with a face value of ₹10 each, Ambuja will issue 328 equity shares with a face value of ₹2 each to eligible ACC shareholders.

• Also, for every 100 equity shares of Orient Cement with a face value of ₹1 each, Ambuja Cements will issue 33 equity shares with a face value of ₹2 each to eligible shareholders of Orient Cement.

"This initiative aligns with Ambuja Cements' strategic plan to increase cement production capacity from 107 MTPA to 155 MTPA by FY28, facilitating efficient capital allocation and prompt adaptation to market requirements," it said.

What is the current stakeholding of Ambuja Cements?

Currently, ACL holds a 50.05% share in ACC, a 72.66% share in Orient Cement, which it acquired from CK Birla, and a 99.94% share in the Hyderabad-based Penna Industries. It owns a 58.08% share in Sanghi Industries.

The "merger of Sanghi and Penna with Ambuja" was approved by the ACL board in December last year, and the process is "currently under statutory approval," the company informed.

"The promoter & promoter group holding in Ambuja Cements will be reduced to 60.94% from 67.65% post approval of all ongoing and proposed schemes of merger of Sanghi, Penna, Orient and ACC," it said.

What management said

Karan Adani, Non-Executive Director – Ambuja Cements, Adani Group, said the consolidation represents a transformational step in building a globally competitive, integrated cement and building materials organisation.

"By bringing Ambuja Cements, ACC, and Orient Cement under a single corporate structure, we are strengthening our ability to drive operational excellence, accelerate growth, and deliver sustainable long-term value. This merger builds on our already proven track record to further position the business to drive efficiency and productivity," he said.

Merger appointed date

Over the appointed date for the proposed merger, ACL said, "For ACC Ltd, the appointed date is January 1, 2026, and for Orient Cement Ltd, the appointed date is May 1, 2025."

The appointed date in a merger is the specific, agreed-upon date from which the scheme of arrangement becomes effective, meaning the assets and liabilities of the merging company are deemed transferred, even if the legal process finishes later.

Does it require approval from CCI?

According to the company, these mergers require "no approval of the Competition Commission of India (CCI)" as these transactions are intra-group mergers.

The merger will simplify and rationalise the network, branding, and sales promotion-related spending. This will help optimise costs and improve margin by at least Rs 100 per metric tonne.

The amalgamation also eliminates "structural duplication, reduces administrative costs, and enables faster, more agile decision-making.

"In addition, there will be no specific MSA required with ACC, Orient, Penna & Sanghi, as these subsidiaries will become an integral part of Ambuja Cements," it said.

A master supply agreement (MSA) is required to share resources, such as cement, clinker, raw materials, and toll grinding for cost savings, leveraging their combined scale.

Merger to create stronger entity with greater scale, efficiencies, and financial strength

In its press release, Ambuja Cements said the following.

This consolidation is a major step for Adani Group’s cement business, creating an integrated and stronger entity with greater scale, efficiencies, and financial strength.

About Ambuja Cements

Ambuja Cements, which has crossed 100 MTPA (million tonnes per annum) capacity in FY25 in a record time, mainly through acquisitions, now aims to reach 118 MTPA by FY26 and 140 MTPA by FY28, primarily through brownfield expansion projects.

Adani Group is a new entrant in the cement sector. It jumped into the cement sector in September 2022 after acquiring controlling stakes in Ambuja Cement from Swiss firm Holcim for cash proceeds of $6.4 billion (about ₹51,000 crore).

Ambuja Cements owned a 51% stake in ACC Ltd and pursued inorganic growth, acquiring small companies such as Hyderabad-based Penna Cement and Saurashtra-based Sanghi Industries. Earlier this year, it also acquired Orient Cement from the CK Birla group.