In a move aimed at consolidating its Indian operations, Swiss cement major Holcim will increase its control in ACC and Gujarat Ambuja Cements for close to Rs 2,700 crore (Rs 27 billion).
Holcim is in talks to buy Gujarat Ambuja Cements' 33 per cent stake in Ambuja Cement India Ltd (ACIL) that, in turn, holds 35 per cent in ACC and 9.93 per cent in Gujarat Ambuja Cements. At present, Holcim owns 67 per cent in ACIL.
This will make ACIL a wholly-owned Holcim subsidiary.
Going by current stock market prices, ACIL's holding in these two companies is worth nearly Rs 8,150 crore (Rs 81.50 billion). Gujarat Ambuja's one-third stake in ACIL could, thus, be valued at around Rs 2,700 crore (Rs 27 billion).
Sources close to the development said the proposed move by Gujarat Ambuja was in line with its two-year-old agreement with Holcim under which it had reserved the put (or sell) option and Holcim had the call (buy) option for one-third of ACIL.
In 2005, Holcim had bought a 67 per cent stake in ACIL -- 40 per cent from the government of Singapore and American International Group and 27 per cent through subscription of preferential shares-- for $800 million (Rs 3,502 crore).
This acquisition gave Holcim a stake in ACC. In 2006, Holcim also bought a stake in Gujarat Ambuja from its promoters, the Seksharia and Neotia families.
However, both parties were not forthcoming on the deal.
When contacted, Peter Gysel, Holcim's deputy head, corporate communications, said, "We do not comment on market rumours. Changes in this respect will certainly be communicated." An e-mail sent to Gujarat Ambuja Cements Managing Director Anil Singhvi failed to elicit a response.
Sources said the deal would be announced shortly. They added that the shares might be transferred to Holcim in three installments.