ACC in a statement to exchange said, "The Board of Directors on the company, at its meeting held today, decided to commence an evaluation of a potential merger between the company and Ambuja Cements with a view to combine the strengths of both businesses so as to benefit all stakeholders."
Ambuja Cements in an exchange statement said, "The Board of Directors on the company, at its meeting held today initiated a study to explore the possibility of a merger between the company and ACC, which could enable both the companies to combine their strengths of business so as to benefit all stakeholders."
Holderind Investments which is an investment arm of global cement giant LafargeHocim owns majority stake in both ACC and Ambuja Cements.
Analysts say merger between Ambuja Cements and ACC will drive synergies via savings across heads and the merged entity will save on logistics costs.
Foreign brokerage CLSA in a note said given valuations of both the companies it is logical to merger ACC into Ambuja.
As of 10:59 am, shares of Ambuja Cements were trading 9 per cent higher at Rs 268.80 and ACC was up 4.9 per cent at Rs 1,736, outperforming the Nifty which was p 0.47 per cent.