Adani’s Long-Awaited Cement Merger Arrives As An Afterthought For The Market
The deal, while monumental in size, arrives at a moment where its operational relevance has been largely superseded by years of aggressive backdoor integration.
The Gist
The merger of ACC Ltd and Ambuja Cements Ltd, announced by the Adani Group, is seen as a significant consolidation in India's cement industry, yet it fails to alter the competitive landscape.
- The combined entity will hold 16.6% market share, still trailing behind UltraTech Cement's 28%.
- Industry insiders believe the merger mainly enhances operational efficiency without changing pricing dynamics.
- The deal is more about administrative consolidation than a transformative shift in market power.
For more than a decade, Indian equity analysts have dedicated scores of reports with a single, persistent forecast about the merger of the country’s two biggest cement companies — ACC Ltd and Ambuja Cements Ltd. The tie-up was seen as a corporate consolidation in India’s industrial landscape that would unlock massive scale.
Last December, the Adani Group finally announced the mega-merger. ACC and the recently acquired Orient Cement Ltd will be folded into Ambuja Cements. It was termed a "Pan-India Cement Powerhouse." However, the industry reaction remains lukewarm.
The deal, while monumental in size, arrives at a moment where its operational relevance has been largely superseded by years of aggressive backdoor integration. At the moment, for the industry, it is an administrative cleanup of a consolidation that, for all practical purposes, already happened.
Won’t Displace Ultratech
The leaderboard in the high-stakes infrastructure segment is clear. At an all-India level, the Aditya Birla Group-owned UltraTech Cement holds 28% of the market share. Adani’s consolidated entity will sit in second place at 16.6%.
The primary critique from industry insiders is that this merger does nothing to tilt that balance. Ambuja Cements already reports consolidated numbers, including those of its subsidiary ACC. The "competitive position and pricing behaviour remain exactly the same," according to internal assessments and dealer feedback.
“The merger does not change much for the sector, as the two companies have already been operating in synergy. For the companies themselves, it definitely means faster or quicker execution and better utilisation of capital and other resources,” an analyst tracking the sector told The Core on the condition of anonymity.
As of March 2025, Orient operated 8.5 MTPA, ACC at a capacity of 38.5 MTPA, and Ambuja’s consolidated capacity was at 88.9 MTPA and expected to close the current financial year with 118 MTPA, including ACC’s capacity. While the numbers are staggering, the market had already priced them in. Ultratech’s global capacity, meanwhile, stands at 194.06 MTPA.
The Efficiency Mirage
The Adani Group acquired controlling stakes in both ACC and Ambuja from the Swiss cement manufacturer, the Holcim Group. The plans of the merger of the two companies were on the cards much before Adani took over from Holcim in 2022, and had been put on hold in 2018.
In the December announcement, the Adani Management quantified the merger’s benefits, projecting a margin improvement of Rs 100 per metric tonne. They cited a "simplified and rationalized network" and a reduction in "branding and sales promotion spends" as the primary drivers.
The analyst also quoted above said, “The ( Rs 100 pmt) savings shared is for both Orient and ACC mergers; it is difficult to isolate what the number is for ACC alone.”
Adani Cement did not share the break-up when requested in an email query sent by The Core.
In September 2023, in an interview with the writer of this story, Ambuja Cements’ then chief executive officer, Ajay Kapur, had noted, “We have already optimised the entire value through the Master Supply Agreement (MSA).”
The integration has extended to the group’s physical presence, too. Registered offices for both ACC and Ambuja were moved to the Adani Corporate House in Ahmedabad. The group has floated plans for Rs 1,000 crore in new office investments across Delhi and Ahmedabad, while monetising legacy assets, such as a prime land parcel in Thane previously held by ACC.
Even the brands are blurring. In a November presentation, Ambuja Cements revealed that its recently acquired assets — Orient, Penna, and Sanghi — have already seen their products move 100% into "Adani Cement" branding. To a dealer in Hyderabad or a contractor in Mumbai, the "merger" is an old story. They have been selling Adani-unified products for months.
“The ACC–Ambuja merger is aimed at improving efficiency & reducing internal costs — not changing dealer operations immediately. This benefits the company right away, and is overall positive in the long term for dealers and channel partners,” said Deepak Navandar, Trimurthi Cement Distributors.
Swap Arithmetic
The merger announced in December involves three cement companies – ACC and Orient Cement, which are to be merged into Ambuja Cements. The plan entails issuing 328 equity shares of Ambuja for every 100 equity shares of ACC.
Similarly, for every 100 equity shares of Orient Cement, shareholders will receive 33 equity shares of Ambuja Cements. The transaction is expected to be completed over the next year.
While ACC was made a subsidiary of Ambuja Cements in 2016, Orient was acquired by the group last year. The press statement also clarified that the ‘Adani Ambuja Cements’ & ‘Adani ACC’ brands will continue to operate as usual, with their leading product brands in respective markets.
Shareholding Is Key
Instead of the sector or operations, the newly announced merger holds relevance for shareholders, both minor and major, of the two companies, ACC and Orient Cement. For instance, for promoters, as Adani Cement noted, the merger will allow direct shareholding in a stronger entity.
From a minority shareholder's point of view, analysts have deemed the swap ratio as neutral for ACC shareholders and an upside of 9% for Orient Cement, based on current trading prices. Orient Cement share prices, however, are trading at Rs165+ levels, significantly lower than Rs 300+ levels when the Orient-Adani acquisition was completed.
The company noted, “by pooling financial, operational, and logistical resources, the merged entity will unlock economies of scale. Coupled with a unified market approach and efficient capital deployment, these synergies will boost profitability, strengthen competitiveness, and deliver superior long-term value and benefits to shareholders and other stakeholders.”
In a nutshell, for both entities being merged with Ambuja Cements — ACC and Orient, the most material change would be a delisting, leading to faster and unified decision-making and execution.
What Next?
Overall, consolidation in the industry has led to higher market share for the top-5 players.
The merged entity, Ambuja Cements, is set to emerge as a larger, single company, with fewer holdings at subsidiary levels. For the sector, it is largely status-quo, as Ambuja Cements already operates as a consolidated major entity, gaining from synergies.
This will mean the death of smaller players that lack the massive logistics networks and captive power plants of an Adani or an UltraTech. They will struggle to compete on economies of scale.
The ACC-Ambuja merger will definitely bring administrative ease, with fewer board meetings and one less listed cement entity to track, as some brokerages have already announced, to remove ACC from their active coverage universe. It remains unclear if the savings this would lead to would be significant in operational terms.
