Shares of Ambuja Cements and ACC gained as much as 5 per cent on Thursday after the Cabinet approved Ambuja Cements' proposal to buy 24 per cent stake in its holding company Holcim India.
Ambuja Cements had proposed to acquire 24 per cent stake in its holding company Holcim India from Holderind Investment, which is an arm of Holcim India.
Under this deal, Ambuja Cements will acquire 24 per cent stake in Holcim India for Rs 3,500 crore.
Following this deal, Holcim India will merge with Ambuja Cements. Ambuja Cements will issue 58.4 million shares to Holcim India.
Holcim India owns 50.05 per cent stake in ACC, which implies that Ambuja Cements will hold majority stake in ACC.
These transactions would enable LafargeHolcim to create a linear corporate structure (with Ambuja and ACC becoming parent and subsidiary) and with a view to harvest significant synergies from India operations, a government statement said.
Both Ambuja Cements and ACC are subsidiaries of world's largest cement maker LafargeHolcim.
ACC shares closed 4.68 per cent higher at Rs 1,708.20, while shares of Ambuja Cements ended 1.49 per cent higher at Rs 265.90 compared to 0.65 per cent drop in the broader Nifty. (With agency inputs)
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