The Adani Group recently announced a significant merger in the cement sector. Ambuja Cements, a part of the Adani Group, will be merging its subsidiaries Sanghi Industries Limited (SIL) and Penna Cement Industries Limited (PCIL)with itself. This move is aimed at consolidating their cement business and enhancing overall efficiency and competitiveness.
The merger aims to enhance working capital management, pool resources for faster expansion, and achieve cost savings in administration and governance.
For Sanghi Industries, shareholders will receive 12 equity shares of Ambuja Cements for every 100 shares held in SIL. For Penna Cement, shareholders will receive Rs 321.50 for each fully paid-up equity share of Rs 10 held in the transferor company.
This merger will help Ambuja Cements increase its cement production capacity significantly. The Adani Group aims to achieve a cement manufacturing capacity of 140 million tonnes per annum (MTPA) by 2028, and this merger is expected to help reach that target ahead of schedule.
Further, the merger will enhance working capital management, unified cash flow management, and cost savings in administration and governance are expected outcomes.
This consolidation is part of a series of strategic acquisitions by Ambuja Cements, including the acquisition of Sanghi Industries and Penna Cement Industries earlier this year.
The Adani Group entered the cement sector in September 2022 by acquiring controlling stakes in Ambuja Cement from Holcim for USD 6.4 billion (approximately Rs 51,000 crore).
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