InvestorQ : Can you explain how the sale of Ambuja by Holcim will be structured and is Ultratech more likely to win or Adani and JSW?
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Can you explain how the sale of Ambuja by Holcim will be structured and is Ultratech more likely to win or Adani and JSW?

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Riya Dwivedi answered.
2 months ago
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With Holcim of Switzerland deciding to exit its 63% stake in Ambuja Cement, there are several big players in the queue to buy out the stake. There is Ultratech, Shree Cements, JSW and Adani already in the race. Recently, Arcelor Mittal has also joined the fray to buy out Ambuja Cements. The final deal is expected to be announced over the next few months, once the due diligence is completed.

One of the early contenders to buy the stake in Ambuja Cements was Adani group and it remained the front runner for some time Now there is interest from JSW, Ultratech, Shree Cements and even LN Mittal of Arcelor Mittal. Ultratech of the Birla group is the largest cement company with capacity of 124 MTPA. Here is how the transfer of control in Ambuja Cements could actually work out.

Holcim will hive off its entire 63% in Ambuja Cements and 4% in ACC direct holding. The successful bidder will have to buy out another 26% stake in Ambuja from minority shareholders taking their stake to 89% in total. Now Holcim owns 4% in ACC and Ambuja owns over 50% in ACC. Eventually, the bidder will get control of Ambuja as well as of ACC too. It is likely to be a mix of payment in cash and stock for the deal, but we await details.

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