Adanis accelerates ACC-Ambuja integration to unlock synergies
04 Apr 2023
3 Min Read
CW Team
Last year, the Adani Group, headed by billionaire Gautam Adani, paid approximately $10.5 billion to Holcim of Switzerland for the shares in ACC and Ambuja Cements.
The background process for integrating the activities of ACC Ltd and Ambuja Cements has been started by the Adani Group, preparing the way for their legal merger and unification under the banner of Adani Cements.
Last year, the Adani Group, headed by billionaire Gautam Adani, paid nearly $10.5 billion to Swiss company Holcim for the rights to ACC and Ambuja Cements. The two businesses ran independently under Holcim, each with a distinct environment.
Merger and cost efficiency
It has been uncertain when the two businesses will merge under Adani, but the group has said that it will, with the only remaining question being "when."
A date or deadline for the merger was not provided by business representatives at analyst roadshows by the group last week in Singapore and Hong Kong. They told analysts that the merger's structure was being reviewed, but sources claim that the process of integrating operations and achieving cost savings is moving along at an astonishing rate.
In addition to cost reductions, the merger is about synergies, which have become crucial for the firm given its debt profile and responsibilities.
For instance, as a prelude to the merger, overlapping positions among personnel are being reduced and reorganized to eliminate duality in tasks and remove ambiguities in the reporting structure.
Jobs were reorganized last week in Mumbai, and key corporate roles were moved to Ahmedabad, where control had changed. The procedure of the merger includes this. To simplify employee responsibilities across verticals, the two businesses share regional heads. Personnel are being transferred between the two businesses.
Operations
On the operations side, supply chain, sourcing, and procurement connections are being linked, and expenses associated with logistics and warehousing are being reduced by making greater use of the facilities owned by both businesses.
Due to values, swap ratios, and regulatory approvals, the legal merger is probably going to take some time.
According to Avinash Gorakshakar, Head of Research at Profitmart Securities, the merger procedure will probably take longer than a year because the group's top priorities right now are creating cash flow and carrying out their expansion ambitions.
In terms of branding, he claimed that both brands would likely be utilized in the areas where they are well-known. "ACC and Ambuja both have great brand presence, so they are not likely to be in a rush to rebrand." It will eventually need to be rebranded with the Adani name, but not right away, he claimed.
Ambuja Cements is the dominating company in the North and West, whereas ACC is well-represented in the East and Central regions of the nation.
See also:
Adani group: Big plans laid out for cement
Adani group prepays financing for Ambuja cement
Last year, the Adani Group, headed by billionaire Gautam Adani, paid approximately $10.5 billion to Holcim of Switzerland for the shares in ACC and Ambuja Cements.
The background process for integrating the activities of ACC Ltd and Ambuja Cements has been started by the Adani Group, preparing the way for their legal merger and unification under the banner of Adani Cements.
Last year, the Adani Group, headed by billionaire Gautam Adani, paid nearly $10.5 billion to Swiss company Holcim for the rights to ACC and Ambuja Cements. The two businesses ran independently under Holcim, each with a distinct environment.
Merger and cost efficiency
It has been uncertain when the two businesses will merge under Adani, but the group has said that it will, with the only remaining question being when.
A date or deadline for the merger was not provided by business representatives at analyst roadshows by the group last week in Singapore and Hong Kong. They told analysts that the merger's structure was being reviewed, but sources claim that the process of integrating operations and achieving cost savings is moving along at an astonishing rate.
In addition to cost reductions, the merger is about synergies, which have become crucial for the firm given its debt profile and responsibilities.
For instance, as a prelude to the merger, overlapping positions among personnel are being reduced and reorganized to eliminate duality in tasks and remove ambiguities in the reporting structure.
Jobs were reorganized last week in Mumbai, and key corporate roles were moved to Ahmedabad, where control had changed. The procedure of the merger includes this. To simplify employee responsibilities across verticals, the two businesses share regional heads. Personnel are being transferred between the two businesses.
Operations
On the operations side, supply chain, sourcing, and procurement connections are being linked, and expenses associated with logistics and warehousing are being reduced by making greater use of the facilities owned by both businesses.
Due to values, swap ratios, and regulatory approvals, the legal merger is probably going to take some time.
According to Avinash Gorakshakar, Head of Research at Profitmart Securities, the merger procedure will probably take longer than a year because the group's top priorities right now are creating cash flow and carrying out their expansion ambitions.
In terms of branding, he claimed that both brands would likely be utilized in the areas where they are well-known. ACC and Ambuja both have great brand presence, so they are not likely to be in a rush to rebrand. It will eventually need to be rebranded with the Adani name, but not right away, he claimed.
Ambuja Cements is the dominating company in the North and West, whereas ACC is well-represented in the East and Central regions of the nation.
See also: Adani group: Big plans laid out for cementAdani group prepays financing for Ambuja cement
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