Adani Group's cement business has become larger in India
What's the story
The National Company Law Tribunal (NCLT) has approved the merger of Adani Cementation with Ambuja Cements. The move is aimed at consolidating the Adani Group's cement business and reaping synergistic benefits. The Ahmedabad bench of the NCLT passed an order on July 18, sanctioning the scheme of amalgamation between these two companies.
Statement
NCLT directs Ambuja to comply with applicable regulations
The intergroup merger is based on share swapping and Adani Enterprises will receive around 8.7 million shares of Ambuja Cements as part of the deal. The tribunal has also directed Ambuja Cements to comply with all applicable regulations issued by market regulator SEBI and stock exchanges BSE as well as NSE.
Strategic benefits
Adani Group India's 2nd-largest cement manufacturer
The Adani Group, India's second-largest cement manufacturer with a capacity of over 100 million tons per annum (MTPA), has said that this merger will enhance value addition for both companies. It will also help Ambuja Cement absorb Adani Cementation's business more efficiently and economically. The merger is expected to improve resource utilization, lower overheads, and reduce compliance requirements for the combined entity.
Operational efficiency
Amalgamation will enable quick start of construction at various sites
The amalgamation will also enable the transferee firm (Ambuja Cements) to quickly start construction at various sites of the transferor company (Adani Cementation) and its wholly-owned subsidiary. Adani Cementation has lease rights for limestone mines with resources of some 275 million tons at Lakhpat, Gujarat, and plans to set up a manufacturing unit in Raigad, Maharashtra.