Gautam Adani jetted to Geneva to close a deal that has taken rivals by surprise but the new boss for Ambuja and ACC will face many questions from shareholders as discussions of open offer to a possible merger to even a delisting come to the table. Editorji explores the options:
The Deal Dynamics
- First the basics, Adani has bought over Holcim's India assets which is basically 63.19 percent in Ambuja Cement and 4.48 percent in ACC.
- Ambuja Cement, in turn, owns 50.05 percent in ACC. So total holding for Adani in ACC is over 54%
- So now Adani directly controls Ambuja Cements and indirectly controls ACC.
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The Open Offer
- As per SEBI norms - The Adani group will make an open offer to buy 26 per cent in these two companies from non-promoter shareholders
- The open offer price for shareholders will be set at the offer made to Holcim - Rs 385 for Ambuja Cement and Rs 2,300 for ACC
Delisting on the cards?
- If there is a successful open offer, Adani's stake would stand at 89% in Ambuja and 81% in ACC
- As per SEBI norms promoter can only hold 75%, so Adani would have either pare stake or or de-lists the companies.
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What about a merger?
- In early May 2017, both ACC and Ambuja independently announced that they will consider a possible merger
- This was not pursued due to high cost of transfer of limestone mines and fees for the same
- Limestone is one of the key raw materials that is required for manufacturing cement.
- The rules of fees for transfer of mining leases were changed in 2021 making the merger feasible once again
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