The Adani Group has set in motion the background process for integrating the operations of ACC Ltd and Ambuja Cements, paving the way for the legal merger of the two big cement companies and bringing them under the umbrella Adani Cements entity.

The Adani Group, led by billionaire Gautam Adani, acquired ACC and Ambuja Cements’ stakes last year from Switzerland’s Holcim for about $10.5 billion. Under Holcim, the two companies operated separately, with their own ecosystems in place.

Merger and cost efficiency

Under Adani, the timing of the merger of the two companies has been a matter of speculation, and the group has indicated that it would merge them, the only question being “when”.

At analyst roadshows by the group last week in Singapore and Hong Kong, company officials did not give a timeline or deadline for the merger. They told analysts that the structure of the merger was being studied, but according to sources, the process of the merger in terms of synergising operations and bringing in cost efficiencies is going on and at a startling pace.

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The merger is not only about synergies but also about cost savings, which have assumed importance for the group in view of its debt profile and payment obligations.

For instance, overlapping positions amongst employees are being streamlined and reorganised, to do away with duality in roles and remove ambiguities in the reporting structure as a precursor to the merger.

Last week, businessline had reported that in Mumbai, jobs are being reorganised and key positions within the companies are being relocated to Ahmedabad, where the control has shifted. This is part of the merger process, sources said.

There are common regional heads between the two companies to streamline employee roles across verticals. People are being moved across the two companies.

The Group had not responded to an email seeking clarification on the developments.


On the operations side, procurement, sourcing, and supply chain links are being integrated, while logistics and warehousing costs are being optimised through better utilisation of the facilities of both companies.

The legal merger is likely to take time due to valuations, swap ratios, and regulatory approvals.

Avinash Gorakshakar, Head of Research at Profitmart Securities, said that it was likely to take over a year for the merger process as the immediate concerns of the group are generating cash flows and executing their expansion plans.

So far as branding is concerned, he said both brands are likely to be used in the regions where they are popular. “They are not likely to be in a hurry to rebrand because both ACC and Ambuja have strong brand presence.” Ultimately they will have to rebrand it with the Adani name, but it is not going to happen immediately, he said.

ACC has strong presence in the East and Central parts of the country, while Ambuja Cements is dominant in North and West.