Stocks of both ACC and Ambuja Cements rallied in early trade on Monday after boards of both the companies initiated a study to explore merger between the two. Both the Cement companies in separate statements to exchanges have said that the board of directors on Friday have agreed to start the evaluation of a potential merger between the two. Both the companies are owned by Swiss-based LafargeHolcim Ltd.
“The Board of Directors of the Company at its meeting held tody initiated a study to explore the possibility of a merger between ACC and Ambuja Cements, which could enable both the companies to combine their strengths of business so as to benefit all the stakeholders,” the companies said in a BSE filing. They both clarified that no decision has been taken at this stage and the same will be considered by the Board once the recommendation is received from the special committee of directors and the Audit Committee.
Stocks of ACC touched their 52-week high in early trade on the merger talks. At 10.58 am, ACC was trading 4.95 per cent up at Rs 1737.30. The stock opened at Rs 1680.35 and touched a high and low of Rs 1753.85 and Rs 1680.35, respectively, in trade so far. Later, the share price of ACC closed 3.57 per cent up at Rs 1714.40.
Similarly, Ambuja Cements shares also rallied and were trading 9.11 per cent up at Rs 268.75 at 10.58 am. The stock price opened at Rs 259 and touched a high and low of Rs 270.50 and Rs 258.10, respectively. Sensex was trading 115.56 points up at 29,974.36 during the same time. Ambuja Cements share price later closed 5.89 per cent up at Rs 260.80.
According to Reuters, shares of Ambuja Cements Ltd posted biggest intraday percentage gain since Nov 3, 2015. About 4.6 million Ambuja shares change hands compared with 30-day average of 2.7 million shares. ACC Ltd gained as much as 5.8 per cent to its highest since March 4, 2015. Both stocks were the top two gainers on the broader NSE index in early trade.