Ambuja Cements to merge Sanghi Industries, Penna Cement with self

The Adani Group-promoted firm had acquired SIL and PCIL in 2023 and 2024 respectively

Ambuja Cements on Tuesday announced an amalgamation of its two subsidiaries Sanghi Industries Limited (SIL) and Penna Cement Industries Limited (PCIL) with itself.

 

The Adani Group-promoted firm -- which had announced acquisition of SIL and PCIL in 2023 and 2024 respectively -- said it has entered separate Schemes of Arrangement of the two subsidiaries.

 

The move, the company said, aims at enhancing shareholder value, and streamline the organisation structure and simplify compliance requirements for effective governance.

 

For the listed entity SIL, the statement said, for every 100 equity shares of SIL, Ambuja Cements will issue 12 equity shares with a face value of Rs 2 each, to eligible shareholders of SIL. Thereby, the shareholders of SIL will become the shareholders of Ambuja Cements.

 

Ambuja Cements said the SIL transaction is expected to be completed within 9-12 months, subject to requisite approvals.

 

Ajay Kapur, chief executive officer, cement business of Adani Group, said, “This merger aims to make our company more competitive and efficient, ultimately enhancing shareholder value.”

 

Ambuja Cements announced it will acquire a controlling stake in SIL at an enterprise value of Rs 5,000 crore in 2023. At present, SIL has a clinker capacity of 6.6 MTPA, cement capacity of 6.1 MTPA, and limestone reserves of Rs 1 billion tonnes.

 

Later in June this year, Ambuja Cements said it would acquire 100 per cent shares in Hyderabad-based PCIL at an enterprise value of Rs 10,422 crore. PCIL has four integrated plants in Andhra Pradesh and Telangana, along with a grinding unit in Maharashtra. It has an operational capacity of 10 MTPA.

 

For the proposed merger for unlisted subsidiary PCIL, Ambuja Cements said, it will pay, to the equity shareholders of the Penna Industries, other than itself, Rs 321.50 for every one equity share held in Penna Industries. It is not immediately clear who these shareholders would be.

 

In June, Adani Group had announced a similar merger and ownership restructuring for its cement assets housed under Ambuja Cements and Adani Enterprises. Part of the scheme, Adani Cementation, was to be merged with Ambuja, while Adani Cement Industries, was to become a wholly-owned subsidiary of Ambuja Cements.

 

Adani Cementation held an under-construction 2.5 million tonne per annum (MTPA) grinding unit in Raigad, Maharashtra, along with a captive jetty, and limestone reserves. Adani Cement Industries held a 1.3 MTPA grinding capacity in Dahej, Gujarat, and an expansion plan of 1.20 MTPA.