Reality Check: Ambuja Cements: No merger

Cement manufacturers Ambuja Cements and ACC, both part of the LafargeHolcim group, have called off the merger proposed last May. However, a merger still remains the ultimate goal of both the companies.

After this announcement, the shares of Ambuja Cements, which holds majority stake in ACC, fell 3 per cent. It was expected to make the combined entity one of the largest cement players in the country.

The special committees (the boards of both companies) feel that there are certain constraints in implementing the merger.

 

 

 

The merger was expected to benefit Ambuja Cements as there would be significant cost saving. However, in the meantime, the boards of the companies have approved an arrangement with ACC for sale and purchase of materials and services so as to maximise synergies . The terms of the arrangement are yet to be announced.

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