Shares of Orient Cement and Ambuja Cements rallied up to 10% on Tuesday, December 23, after Ambuja Cements, part of the Adani Group, announced the approval of a major merger involving ACC Ltd and Orient Cement Ltd.
The shares of Orient Cement zoomed sharply by 9.8% to an intraday high of Rs 180, while Ambuja shares surged 4.3% to their day’s high of Rs 563.25 in early trade. Meanwhile, ACC Ltd shares slid 1.3% to Rs 1,752.55.
The board of Ambuja Cements has approved separate schemes of amalgamation to merge both companies into Ambuja, setting the stage for the creation of a single, pan-India cement platform.
The development is aimed at strengthening operational efficiency, improving capital allocation, and simplifying the overall corporate structure. As per the official statements, all three entities, Ambuja, ACC, and Orient Cement, will operate under one unified corporate structure post-merger, although their individual brands will continue to be marketed independently in their respective regions.
The company has disclosed that the entire consolidation process is expected to be completed over the next year.
As part of the transaction, Ambuja Cements will issue shares to shareholders of ACC and Orient Cement under a structured share swap scheme. ACC shareholders will receive 328 equity shares of Ambuja Cements of face value Rs 2 each for every 100 shares of ACC with a face value of Rs 10 each. Similarly, shareholders of Orient Cement will receive 33 equity shares of Ambuja Cement of face value Rs 2 each for every 100 shares of Orient Cement with a face value of Rs 1 each.
The company highlighted that this merger is intended to generate financial and operational synergies by optimising manufacturing and logistics networks, reducing administrative costs, and eliminating structural duplications. Ambuja expects that branding, distribution, and promotion-related efficiencies could improve margins by up to Rs 100 per tonne.
Ambuja Cements also mentioned that this consolidation aligns with its longer-term expansion strategy, which includes plans to ramp up cement production capacity from the current 107 million tonnes per annum (MTPA) to 155 MTPA by FY28. The post-merger entity is expected to operate with a strong and debt-free balance sheet, according to the company’s disclosure.
In addition to ACC and Orient Cement, Ambuja Cements also indicated that schemes for the amalgamation of Sanghi Industries and Penna Cement are under evaluation and at different stages of approval.
Once complete, stakeholders across all these entities are expected to engage with a single, unified company. The merged entity will function under a consolidated ESG (Environmental, Social, and Governance) framework that emphasises renewable energy, low-carbon cement production, and sustainable manufacturing practices.
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