Holcim to increase stake in Ambuja Cements to 61.39%

NEW DELHI: Swiss cement maker Holcim on Wednesday said it will increase stake in Ambuja Cements Ltd from 50 per cent to 61.39 per cent as part of restructuring its Indian operations.

The deal also involves Ambuja Cements buying Holcim's 50.01 per cent stake in ACC.

While both Ambuja and ACC will continue to operate as separate entities, the restructuring will allow for closer back-end cooperation between the companies as well as simplify the group structure.

Holcim owns about 50 per cent stake in both the firms. In a statement, Holcim said it intends to streamline the ownership structure of its operations in order to strengthen the existing platform and create value for all stakeholders.

Holcim said the Board of Ambuja and Holcim have agreed that the transaction will be effected through a merger of Holcim India Pvt Ltd, a wholly owned financial holding subsidiary, with Ambuja.

HIPL currently directly holds a 9.76 per cent stake in Ambuja and a 50.01 per cent stake in ACC. In a two stage deal, Ambuja will first acquire, through a purchase, a 24 per cent stake in HIPL for a cash consideration of Rs 3,500 crore, followed by a stock merger between HIPL and Ambuja.

As part of the merger, Holcim will receive 584 million new equity shares of Ambuja resulting in an increase of its ownership in Ambuja from the current 50.55 per cent to 61.39 per cent.