ACC-Ambuja-Orient Cement Merger: What is in it for shareholders?

The board of ACC Ltd. on Monday, December 22, approved the merger of the company with Ambuja Cements, another group entity. The announcement was made after market closing hours.

The scheme is subject to necessary statutory and regulatory approvals, including the approval of the National Company Law Tribunal (NCLT). The said scheme will also be filed with the stock exchanges to obtain their No-Objection Certificate.

In addition to this, the board of Orient Cement also approved its merger with Ambuja Cements. Ambuja had acquired a majority stake in Orient Cement in April this year, having first announced the deal in October last year.

Here's what the merger entails for the shareholders of these respective companies:

Ambuja Cements will be issuing 328 shares to shareholders of ACC, for every 100 shares that they own as on the record date, which is yet to be determined.

At the end of the September quarter, ACC had nearly 2.2 lakh small retail shareholders, or those with authorized share capital of up to ₹2 lakh, that had a 10.56% stake in the company.

For Orient Cement shareholders, Ambuja will be issuing 33 shares for every 100 shares they own as on the record date. A CNBC-TV18 analysis shows the ratio to be in favour of Orient Cement shareholders by 9%.

Orient Cement had over 91,000 small retail shareholders, who own a 12.5% stake in the company at the end of the September quarter.

The management has cited simplification of the group structure, improving transparency and governance standards and a move in-line with Ambuja's plans to increase cement production capacity from 107 MTPA to 155 MTPA by financial year 2028 as the key rationale behind the move.

Additionally, the management is also targeting cost savings of up to ₹100 per tonne from supply chain efficiencies.

Jyoti Gupta of Nirmal Bang told CNBC-TV18 that benefits of an additional ₹40 to ₹50 per tonne over the next two to three years are also expected due to improved tax efficiency and working capital optimization.

At the completion of the merger exercise, which is likely to take up to 12 months, the promoter shareholding in the consolidated entity will come down to 60.9% from 67.65% currently.

Shares of Orient Cement have halved in value this year, having declined 53%, while ACC shares are down 13.5% so far in 2025. Ambuja's shares have been little changed on a year-to-date basis.