Holcim's Strategy by SSKI
Consolidating future
The merger of Gujarat Ambuja Cements (GACL) and Ambuja Cement Eastern (ACEL) has given rise to crossholdings between Ambuja Cement India (ACIL) and GACL. This has complicated the holding structure of Holcim's investments in India. In order to facilitate a consolidation of its investments, we believe Holcim is likely to pursue a merger between ACIL and GACL over the next 12-18 months. The merger ratio and Holcim's stake in GACL would depend on ACIL's value, which in turn will be driven by the share price of ACC. We believe the development would be favourable and value-accretive for ACC shareholders. Consequently, we believe owning ACC shares is a beneficial proposition from a longer-term perspective.
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