Holcim is to increase its shareholding in Ambuja Cements as part of the Swiss major's strategy to restructure and streamline its operations in India.

Through intragroup restructuring, Holcim will increase its shareholding in Ambuja Cements to 61.39 per cent and Ambuja in turn will acquire Holcim’s 50.01 per cent stake in ACC Ltd.

Both Ambuja and ACC will continue to operate as separate entities with their own brands and go-to-market strategies. Holcim said the restructuring “will allow for closer back-end cooperation between the companies as well as simplify the group structure.” The Board of Ambuja and Holcim have agreed that the transaction will be effected through a merger of Holcim India Private Ltd. (HIPL), a wholly-owned financial holding subsidiary, with Ambuja. HIPL currently directly holds a 9.76 per cent stake in Ambuja and a 50.01 per cent stake in ACC.

In a two stage deal, Ambuja will first acquire, through a purchase, a 24 per cent stake in HIPL for a cash consideration of INR35,000m (US$~600m), followed by a stock merger between HIPL and Ambuja.

As part of the merger, Holcim will receive 584 million new equity shares of Ambuja resulting in an increase of its ownership in Ambuja from the current 50.55 per cent to 61.39 per cent. The transaction is subject to Ambuja’s shareholder and regulatory approvals in India.

“This transaction further improves Holcim’s holding structure in India, strengthens the platform for future growth and is expected to generate synergy benefits of INR9000m (US$150m) per annum. These benefits, which will be realized in a phased manner over two years, will be shared by both companies equally through supply chain, shared services and fixed costs optimisation,” said CEO Bernard Fontana.  

In addition, Holcim said it is committing to the Marwar Mundwa expansion project in North-Central India with an overall capacity of 4.5Mta. Holcim is also evaluating additional brown and greenfield investment proposals, such as in ACC Tikaria and Ametha, and will continue to look for opportunities to further optimise its Group structure in India.