Foreign Investment Promotion Board Approval for Holcim
The Swiss building materials firm Holcim has received approval from the Foreign Investment Promotion Board (FIPB) to amalgamate its holding firm, Holcim India, with its subsidiary Ambuja Cements. This move is part of a plan to reorganize and streamline Holcim’s India operations.
Plan Details
Holcim, which holds majority stakes in two leading Indian cement manufacturers – ACC and Ambuja Cements – announced this consolidation plan earlier this year. The plan involves combining processes through a cash and share deal in a two-step process, valued at approximately Rs 15,100 crore.
Regulatory Requirements
Since Holcim's plan exceeds Rs 1,300 crore, it will require approval from the Cabinet Committee on Economic Affairs (CCEA), headed by Prime Minister Manamohan Singh.
Stake Redistribution
As part of the reorganization process, Holcim India's stake of over 50% in ACC will be transferred to Ambuja. Simultaneously, Holcim’s stake in Ambuja will increase from slightly over 50% to 61.39% after the merger of Holcim India with Ambuja.
Key Points of the Merger:
- Ambuja Cements will merge with Holcim India through cash and share transactions.
- Holcim will receive 60 crore new equity shares in Ambuja, increasing its ownership from 50.55% to 61.39%.
Current Stakeholding
Presently, Holcim has a controlling stake in both ACC and Ambuja. The company directly owns 40.79% of Ambuja and another 9.76% through Holcim India (HIPL).
Post-Transaction Stakes
Following these transactions, Holcim will hold a 61.39% stake in Ambuja and a 0.29% stake in ACC directly.