ACC-Ambuja merger to ease investor concerns

Valuation gap with peers should also narrow as merger will drive profitability and volumes

The decision of ACC and Ambuja Cements to explore a merger should be well received by investors. The merger of two LafargeHolcim group companies (Ambuja owns 50.05% in ACC) is likely to unlock gains across many fronts including geographical presence, operations, profitability, marketing, distribution, and raw material sourcing, among others, for the combined entity. The news came after market hours on Friday.

After the merger, the combined entity will have the largest cement-manufacturing capacity in India after UltraTech, allowing it to increase its geographical presence and market share. ACC is a pan-Indian player, while Ambuja is predominantly north-centric with some