Adani to merge Sanghi & Penna units with Ambuja Cements
Adani Cement said it will merge Sanghi Industries and Penna Cement Industries with flagship Ambuja Cements, consolidating the recently acquired companies under a single entity. Shareholders will get a dozen shares of Ambuja Cements for every 100 held in Sanghi Industries, while shareholders of Penna Cement, which is unlisted, will get Rs 321.50 for every share held in the company. The merger is expected to be completed within 9-12 months. Ambuja Cements had a market capitalisation of Rs 1.41 trillion, while that of Sanghi Industries was Rs 19.86 billion. Shares of Ambuja Cements closed 1% lower at Rs 570.95 apiece on the BSE compared to a 1.3% decline in the benchmark Sensex. Sanghi Industries closed 0.38% lower at Rs 76.92 apiece."This merger aims to make our company more competitive and efficient, ultimately enhancing shareholder value," said Ajay Kapur, CEO of the cement business for Adani Group. "Unified cash flow management will pool resources for faster expansion and cost savings in administration and governance, thereby simplifying compliance requirements," he said. Promoters held 67.57% of Ambuja Cements as of September-end. After the amalgamation, certain shareholders of the promoter and promoter group of Ambuja Cements will be transferred to public shareholders. As a result, promoter stake in the company will reduce to 67.18%. Ambuja Cements had acquired Hyderabad-based Penna Cement in June this year for an enterprise value of Rs 10,422 crore. It completed the acquisition in August. Apart from 10 million tonnes of operational production capacity, Penna also has two units under construction, which will add another 4 million tonnes to its total capacity. Sanghi Industries, which runs India's largest cement and clinker plant in a single location, was acquired by Ambuja Cements in December last year for an enterprise value of Rs 51.85 billion. The acquisition was completed earlier this month. Adani Cement is currently the second-largest cement producer in the country with an annual capacity of 89 million tonnes. The Adani Group forayed into cement in 2022 through the buyout of Ambuja Cements and ACC from Holcim for $10.5 billion. It acquired a near 46% stake in Orient Cement in October and will launch an open offer for additional 26% in the company.
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