Research Update on Management Call – Holcim Ambuja Deal


On Saturday, July 27th, 2013, InGovern had a call with Mr. Onne van der Weijde, the Managing Director of Ambuja Cements Limited at their invitation. The following are the highlights of the call:

  • The Board of Directors of Ambuja Cements had considered a straight merger between Ambuja Cements and ACC. This was not taken up due to the management bandwidth required to implement this merger.
  • The Board of Directors also considered issuing all stock of Ambuja Cements for Holcim’s stake in ACC. However, this was avoided as it would have led to a greater dilution for Ambuja minority shareholders.
  • The Board of Directors believed that a combination of stock and cash was the right approach, and independent directors on the Board saw the logic of this structure.
  • To our question on whether a merger between Ambuja Cements and ACC was possible in future, he said that would be a logical way to go.
  • He said that minority shareholders should be happy as the savings of Rs. 900 crores would lead to increase in earnings and that the acquisition of ACC shares was done without any control premium.
  • To our question on whether royalty will continue to be paid by both Ambuja Cements and ACC to Holcim, the reply was that the technical and commercial arrangement will continue, and hence Ambuja and ACC will continue to pay royalty as in the past.


To read the full research note, please click on this link: Research Update on Management Call – Holcim Ambuja Deal