ACC, Ambuja merger back in focus

Among the many amendments made to the bill, the key for the cement sector is removal of fees for transfer of mining leases.

Among the many amendments made to the bill, the key for the cement sector is removal of fees for transfer of mining leases. Analysts say, once this bill becomes a law, it should aid the mergers and acquisition process for the cement sector.

Shares of key cement makers ACC Ltd and Ambuja Cements Ltd are back on investors' radar after the Lok Sabha approved the Mines and Minerals (Development and Regulation) Amendment Bill recently.

Among the many amendments made to the bill, the key for the cement sector is removal of fees for transfer of mining leases. Analysts say, once this bill becomes a law, it should aid the mergers and acquisition process for the cement sector. With that, the focus is back on the potential merger between ACC and Ambuja, which are controlled by the same parent Lafarge Holcim.

In a note dated 22 March, foreign research house Citi said, "Currently, Ultratech pays a transfer fee of Rs64/tonne of limestone on limestone produced from the mines acquired from JP Associates and Century. The new ruling may lead to merging assets acquired from Binani Cement (currently held as a subsidiary). We think the change is also positive for ACC/Ambuja's potential merger (subject to other legal clearances and stamp duty payment)."

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