Holcim-Ambuja Cements deal not winsome for investors The proposed restructuring of operations by Swiss cement maker Holcim, featuring a hike in its stake in Ambuja Cements, does not bode well for shareholders of Ambuja. That is because it would imply transfer of nearly all the cash on the books of Ambuja CementsBSE -10.52 % to the parent Holcim and a higher stake in the combined entity, which hardly impacts investors of ACC. Ambuja Cements has a cash and bank balance of Rs3,700 crore. In the run-up to the restructuring, Ambuja Cements will acquire a stake of 24% for Rs3,500 crore in Holcim India from Holderind International, or Holcim. This will mean an outgo of Rs 11.3 for each share. Subsequently, there will be a merger of Ambuja Cements and Holcim through a share-swap arrangement. After the merger, the combined entity will control 50.5% of the holding in ACC. The merger-swap ratio values ACCBSE -10.52 % at Rs1,260 per share, which is at a premium of Rs30 to the current price. Even after the merger, the stake of Holcim in Ambuja Cements will go up from 50.55% to 61.39% while ACC will become an arm of Ambuja Cements. b2bsalesarrow
Posted on: Fri, 26 Jul 2013 03:19:09 +0000