GIC votes against Holcim-ACC-Ambuja deal

Shares of ACC and Ambuja traded weak on Tuesday

Swiss-based cement major Holcim has found no takers for its complex restructuring in its Indian operations among India's state-run insurers.

On Tuesday, the last day of voting, General Insurance Corporation of India (GIC), the sole reinsurance company in India, voted against the Holcim-ACC-Ambuja deal.

A senior official of the company confirmed this development. GIC owns 0.94 per cent in Ambuja Cements.

According to industry sources, the four public general insurance companies - New India Assurance, National India, United India and Oriental Insurance - have voted against the deal. These firms together hold about two per cent in the company.

"We voted against the deal, since we felt that it was detrimental to shareholder interest," said a senior official with a public-sector insurer.

While sources said Life Insurance Corporation of India (LIC), too, may have voted against the deal, this could not be independently verified as LIC officials were not available for comment.

LIC has a little over six per cent holding in Ambuja Cements.

This comes as a setback for the cement giant, which operates in India through its two firms - ACC and Ambuja. Together, these control about 17 per cent of India's cement market.

The deal, which was inked in July this year, was a two-phased restructuring. Holcim was to raise its stake in Ambuja from 50.55 per cent to 61.39 per cent. Ambuja, in turn, would buy Holcim’s stake in ACC. At a later date, Ambuja intends to further increase its stake in ACC by 10 percentage points for an investment of up to Rs 3,000 crore through open-market purchases.