ACC Ltd. announces an acquisition

The Scheme stipulates 328 fully paid Ambuja Cements equity shares of face value Rs 2 each for every 100 fully paid ACC equity shares of face value Rs 10 each. ^[1]

The valuation report supports this as a relative fair-value ratio, not as a ratio based on standalone book value:

• The valuers assigned weighted average fair values of Rs 631.2 per Ambuja share and Rs 2,066.1 per ACC share. The implied exchange ratio is therefore 327.33 Ambuja shares per 100 ACC shares, derived as Rs 2,066.1 / Rs 631.2 × 100; this was rounded to 328 shares. ^[1]
• The weighted values comprised DCF at 50% weight, market-price valuation at 25%, and comparable-companies multiples at 25% for each company. ^[1]
• The report considered a summation or cost approach, which produced Rs 228.1 per Ambuja share and Rs 1,063.8 per ACC share, but assigned it no weight. It states that this approach was not adopted because it does not reflect the intrinsic value of a business operating as a going concern. ^[1][1]

Implication relative to book value: the cited valuation table does not provide standalone book-value-per-share or standalone net-worth figures for ACC and Ambuja; it reports fair values under DCF and market-based methods instead. ^[1] Accordingly, the filing supports the 328:100 ratio by reference to relative earning capacity, market prices and trading multiples—not by demonstrating that the ratio matches the companies’ standalone book values. The cost-approach figures should not be treated as standalone book values, particularly because the valuers explicitly excluded them from the final weighting.

The proposed merger accounting is the pooling-of-interest method for a common-control combination. ACC would be absorbed into Ambuja on a going-concern basis, with ACC dissolved without winding up, effective from the appointed date of 1 January 2026. ^[2]

Proposed accounting treatment

• Ambuja will account for the amalgamation under Appendix C of Ind AS 103, which applies to business combinations between entities under common control. ^[3]
• Assets and liabilities transferred from ACC will generally be recorded at their existing carrying values, rather than fair values, and ACC’s reserves will retain their identity and carrying amounts. ^[4]
• Ambuja’s investment in ACC and any inter-company balances between the two companies will be cancelled. ^[4]
• The consideration issued to eligible ACC shareholders will be recognised at nominal or face value in Equity Share Capital. Any resulting surplus will be transferred to a separately presented Capital Reserve; any deficit, after specified adjustments, will be debited to Retained Earnings. ^[4]
• If accounting policies differ, Ambuja’s policies will prevail. Comparative standalone financial information will be restated as if the merger had occurred from the beginning of the comparative period presented. ^{[4] [4]}
• No separate accounting treatment is prescribed in ACC’s books because ACC will dissolve and transfer its assets, liabilities and reserves to Ambuja on a going-concern basis. ^[4]

Are the operational synergies quantified?

No. The filing describes the expected synergies qualitatively but does not provide explicit monetary, percentage or run-rate targets. It refers to improved asset utilisation, process standardisation, elimination of operational overlaps, pooling of operational and logistical resources, economies of scale and recurring savings from removing duplicated corporate functions. ^{[5] [6] [7]}

Specifically, the filing does not quantify:

• logistics or freight savings;
• procurement savings or purchasing targets;
• improvement in plant or capacity utilisation;
• annual cost savings, EBITDA uplift or margin expansion attributable to the merger.

The capacity-related language is also directional: it refers to future capacity expansion and efficiency improvement, rather than specifying an incremental utilisation rate or financial benefit. ^[5] The result is a conventional common-control accounting framework accompanied by a strategic rationale for synergies, but without a separately measurable synergy case in the Scheme document.

The merger is not yet effective. As of the notice dated 27 August 2026, the stock-exchange observation stage had been completed, but shareholder approval and final NCLT sanction remained outstanding; the notice does not report a CCI approval or provide a calendar long-stop date.

Long-stop date: The notice extracts do not state a specific management long-stop date for completion of the merger. A third-party report published on 24 December 2025 said the transaction was expected to be completed “within about a year,” but that is an indicative completion expectation, not a clearly disclosed contractual long-stop date. ^[12]

The effective date under the Scheme is the last date on which all specified approvals or events have occurred or been waived; therefore, the 1 January 2026 appointed date does not mean the merger has already become operative. ^[9]