The boards of Gujarat Ambuja Cements Ltd (GACL) and Ambuja Cement Eastern Ltd (ACEL) have decided to combine the two companies. Holcim-controlled ACEL will now be merged into GACL. As a result of this transaction, Holcim’s equity interest in GACL will increase to approximately 23 per cent.
The merger is subject to the approval of GACL and ACEL shareholders and the responsible authorities, and is expected to close before year-end 2006.
At the same time GACL has joined the shareholders agreement which is designed to transfer management of GACL to Holcim. Futhermore, three Holcim representatives have been elected to the board of GACL.
These decisions follow the closure of a mandatory public offer to the shareholders of GACL. As expected, Holcim was tendered only 366,481 shares at a price of Rs 90.64 per share. Thus, Holcim’s total investment in GACL now amounts to US$477m.
The combined group GACL/ACEL has a cement capacity of 16Mta
Together with ACC, Holcim therefore participates in 34Mt in India.
An additional 4Mt will go on stream in the next 18 months. This positions Holcim as one of the market leaders in the dynamic growth market of India and in addition provides scope to further expand its network around the Indian Ocean.