It said in a statement that the board also provided its approval for Ambuja to make commercially reasonable efforts to invest up to R3,000 crore to acquire an economic ownership in ACC of up to 10% without triggering a mandatory open offer, subject to shareholders and regulatory approvals as applicable.
The merger swap ratio proposed by two independent accounting firms and validated through a fairness opinion from an independent merchant banker, and approved by the Ambujas board on recommendation of the audit committee, is one Ambuja share for 7.4 Holcim India shares, translating into an implied swap ratio of 6.6 Ambuja shares for every ACC share.
Based on the approved merger swap ratio, Ambuja will issue 58.4 crore new equity shares of Ambuja to Holcim, as consideration for the merger. Post the merger, the expanded capital base of Ambuja (post cancellation of the shares held by Holcim India in Ambuja and the issuance of new shares as aforesaid) will increase by 28% and comprise of 197.75 crore shares. Holcim will then own 61.39% of Ambuja and Ambuja will in turn own 50.01% of ACC.
Commenting on the development, iNarotam Sekhsaria, non-executive chairman, Ambuja and ACC, said This transaction allows us to capitalise on the prevailing Holcim Group platform, promotes greater co-operation between the group companies, and unlocks significant synergies over time. Investment in the expansion project at Marwar Mundwa is a positive and big next step forward and shows Holcims commitment.
Ambuja MD Onne Van Der Weijde said, This transaction is a natural and an important next step towards further strengthening Holcim Groups India platform to increase profitability and facilitate more flexible use of capital. ACC has a strong heritage and its brands have great value in the market both companies will significantly benefit from a closer collaboration to be ready to embark on the next phase of growth and optimisation.
The company said that the move would lead to a synergy potential of approximately R900 crore through supply chain and fixed cost optimisation, which would be realised in a phased manner over two years post completion of the transaction.
It would also lead to consolidated and more balanced pan-India footprint with 58 million tonne per annum capacity.
The companys well-established, complementary premium brands will continue to exist along with independent go-to-market strategy with strong dealer networks and distribution in respective markets.