Adani Group on Tuesday announced that it will merge its recently acquired Sanghi Industries and Penna Cement with Ambuja Cements to consolidate cement operations in one unit.
Ambuja Cements issued separate schemes of arrangement of its subsidiaries Saurashtra-based Sanghi Industries (SIL) and Andhra Pradesh-based Penna Cement Industries Limited (PCIL).
"This consolidation will help to streamline the organisation structure and simplify compliance requirements for effective governance," said a statement from the country's second-largest cement maker.
This will also help billionaire Gautam Adani's cement arm to leverage the combined strengths of the acquired entities, as it is competing with the Aditya Birla Group firm UltraTech Cements, a market leader in the segment.
At a meeting held on Tuesday, the board of Ambuja Cement approved the scheme of arrangement with Sanghi Industries and Penna Cement Industries.
The Adani group firm, which also owns ACC Ltd, said the amalgamation is subject to requisite approvals and expects the transaction to be completed within 9-12 months.
Ambuja Cements holds 58.08 per cent of the paid-up equity share capital of Sanghi Industries. It acquired the company in December 2023.
This will based on swap rationale and "for every 100 equity shares of SIL with a face value of Rs 10 each, Ambuja Cements will issue 12 equity shares with a face value of Rs 2 each", to eligible shareholders of SIL.
In Penna Cement, it will pay equity shareholders, whose names are recorded in the register of members on the record date, "Rs 321.50 for every one fully paid-up equity share of Rs 10 each" held in the transferor Company".
Ambuja Cements, a subsidiary of Adani Cement, completed its acquisition of Penna Cement Industries on August 16, 2024.
"This merger aims to make our company more competitive and efficient, ultimately enhancing shareholder value," said Adani Group CEO – Cement Business Ajay Kapur.
Enhanced working capital management and internal funds will support the growth of our business operations.
Moreover, unified cash flow management will pool resources for faster expansion and cost savings in administration and governance, thereby simplifying compliance requirements.
"This advancement through a larger entity will increase market competitiveness and deliver greater value to our shareholders," he said.
(With PTI inputs)
