Holcim to increase stake in Ambuja Cements

Holcim plans to further expand its 32.3 percent stake in the Indian Group Company Ambuja Cements Ltd (ACL) and acquires from the founding families another 3.9 percent of ACL at INR 154 per share corresponding to approximately USD 220 million. The purchase is subject to the approval of the Reserve Bank of India. The families will continue to hold a stake in ACL. They will stay closely engaged with Holcim and the Company, and will further support the growth and development of Holcims position in India. Suresh Neotia will continue as Chairman and Narotam Sekhsaria as Vice Chairman on the Board of Directors of ACL and will play a significant role for the benefit of the Company.

With the purchase of this block of shares of ACL Holcim exceeds the limit of 5 percent per fiscal year and is obliged to make an offer to the other shareholders according to the Indian takeover code. Therefore, the Group will launch a public takeover offer for another 20 percent of the share capital at a price of INR 154 per share. Subject to the approval of the Indian authorities, Holcim expects this transaction, worth a maximum of around USD 1.12 billion, to be concluded by the end of November 2007. The offer price represents a premium of approximately 20 percent over the average price of the share on the National Stock Exchange for the last two weeks.

Provided that the public offer is accepted in full, Holcim's stake in ACL will rise to more than 56 percent. The corresponding total investment of USD 1.34 billion would be financed entirely through internal resources and existing credit facilities.

India is the second largest cement market worldwide with high growth potential. ACL as a leading cement supplier in India, wilt increase its annual cement capacity from 18 to 21 million tonnes by the end of the year. An additional 5 million tonnes are under construction in Bhatapara (State of Chhattisgarh) and Rauri (Himachal Pradesh), which will come on stream in 2009.