Mumbai: Swiss cement maker Holcim Ltd raised its holding in India’s second-biggest cement firm ACC Ltd to about 41%, buying a further stake of 3% at an estimated Rs540 crore.
Holcim, the world’s second-largest cement maker, already controlls nearly 38% of ACC and close to 30% in India’s third-largest cement maker Ambuja Cements, formerly Gujarat Ambuja Cements Ltd.
The 3.5% stake, or nearly 60 lakh shares, was bought at around Rs900 per share, Amit Kothari, assistant to executive committee of Holcim, said in a telephonic interview, valuing the deal at around Rs540 crore. R. Nand Kumar, head of corporate communications at ACC, declined to comment. In Switzerland, Holcim confirmed it had raised its stake.
Stock market data showed 5.859 million shares had changed hands in block deals at an average price of Rs899.07 per share. ACC’s shares closed at Rs885.55, up 2.68% on the Bombay Stock Exchange, where the benchmark Sensex index fell 0.82/%.
The latest purchase price was more than double the Rs370 a share Holcim offered to minority holders in 2005 when it first bought a minority stake in ACC, with an intention to take its holding to 50%. ACC shares hit a 52-week high of Rs1,192 in early December.
Holcim has been raising its stake directly and indirectly in both ACC and Ambuja Cements and the market is speculating that it wants the two companies to merge eventually to compete better in India’s consolidating cement sector.
However, the chairman of ACC had said in March there were no plans to merge the two firms and analysts say a merger is unlikely as the two companies would not gain much from being put together.
“Everyone knows that Holcim wants to have complete management control in both ACC and Ambuja Cements,” said Rahul Singhvi, a cement analyst with Mumbai brokerage K.R. Choksey. “But there is very bleak possibility of a merger.”
In March, Ambuja Cement India Pvt. Ltd, which is 78% owned by Holcim, had raised its stake in ACC to 37.07% from 35.15% while Holcim had bought a further 0.29% through another of its units.
Enam Securities, the stock broking arm of Enam Financial Consultants Pvt. Ltd, advised Holcim on the deal. Enam declined to name the sellers.
Shilpa Shree of Mint contributed to this story.