Ambuja–ACC Merger: Share Swap Details, Valuations And Analyst Views — All You Need To Know

Ambuja Cements Ltd. on Monday received approval for two separate schemes of amalgamation from its board of directors to merge ACC Ltd and Orient Cement Ltd, establishing a single consolidated 'One Cement Platform'.

"The merger will create a pan-India cement powerhouse," the Adani Group company said in a release on Monday.

The transaction, expected to be completed over the next one year, marks one of the largest restructuring moves in India’s cement sector and is aimed at simplifying group structure, improving transparency and unlocking operational efficiencies.

The merger involves a combination of share swaps and a cash transaction.

For ACC, Ambuja will issue 328 shares for every 100 shares of ACC. At Ambuja’s current market price of Rs 540, this values 100 ACC shares at Rs 1,77,120, compared with ACC’s current market value of Rs 1,77,600 (based on Rs 1,776 per share). This implies that ACC is being valued at a marginal discount of around 0.3% to its prevailing market price.

For Orient Cement, Ambuja will issue 33 shares for every 100 shares held. At current prices, this translates into a value of Rs 17,820 for 100 Orient shares, versus a market value of Rs 16,400 (Rs 164 per share). This implies a premium of around 9% to the current market price.

For Sanghi Cement, the swap ratio is 12 Ambuja shares for every 100 Sanghi shares. This values 100 Sanghi shares at Rs 6,480, compared with the current market value of Rs 6,200 (Rs 62 per share), representing a premium of about 4.5%.

Penna Cement will be acquired through a cash transaction, with Ambuja offering Rs 321.5 per share to non-promoter shareholders, representing approximately 0.06% of Penna’s equity.

Management has highlighted multiple strategic benefits from the merger. The consolidation will simplify the group structure and position Ambuja as the single operating cement platform within the group. This is expected to eliminate related-party transactions, enhance transparency and strengthen governance standards. Importantly, the merger also removes any holding company discount that may exist across the group entities.

From an operational perspective, management is targeting cost savings of around Rs 100 per tonne, driven largely by supply chain efficiencies, better logistics planning and improved procurement at scale.

For Ambuja, the merger will result in equity dilution of around 13.2%, with the issuance of approximately 32.65 crore new shares. As a result, promoter holding will decline to 60.9% from the current 67.7%. Despite the dilution, Ambuja’s market capitalisation is expected to rise to around Rs 1.5 lakh crore from Rs 1.3 lakh crore at current market prices, reflecting the expanded asset base and earnings potential.

JPMorgan has maintained a Neutral rating on Ambuja with a target price of Rs 585. The brokerage noted that the anticipated merger with ACC and Orient Cement should materially simplify the group structure and make financial reporting easier to understand. JPMorgan also expects ACC’s stock to start tracking Ambuja more closely following the announcement.

CLSA has highlighted that with ACC currently trading at a sharp discount to Ambuja, the merger implies value accretion for Ambuja shareholders. The brokerage maintains an Outperform rating on Ambuja while retaining a Hold recommendation on ACC.

Disclaimer: NDTV Profit is a subsidiary of AMG Media Networks Ltd, an Adani Group Company.