The Competition Commission of India has approved the proposed acquisition of up to 72.8% shareholding of Orient Cement Limited by Ambuja Cements Limited.

Ambuja Cements Limited (Acquirer) is engaged in the manufacture and sale of grey cement, including Ordinary Portland Cement (OPC), Pozzolona Portland Cement (PPC), and Pozzolona Composite Cement (PCC). The Acquirer (including its subsidiaries) operates 22 integrated cement plants across India, as well as 10 bulk cement terminals and 21 grinding units.

Orient Cement Limited (Target) is involved in the business of manufacturing grey cement, including PPC and OPC. It has three manufacturing facilities at Devapur (Telangana), Chittapur (Karnataka) and Jalgaon (Maharashtra), with distribution in 10 states across India.

The proposed transaction comprises of the following steps:

(i) Step 1: Acquisition of 46.80% of the issued share capital in the Target by the Acquirer, including 37.90% held by the current Promoter and Promoter Group and 8.90% from certain public shareholders.

(ii) Step 2: Step 1 triggers an obligation on the Acquirer to make an open offer under Regulation 3(1) and 4 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 for acquisition of up to 26% of the expanded share capital of the Target (Open Offer). Assuming full acceptance of Open Offer, the shareholding of the Acquirer will stand at 72.8%.  

Detailed order of the Commission will follow.

Open offer obligation under takeover rules prompts acquisition-based control consolidation, enabling Ambuja Cements to take over Orient Cement. The Competition Commission of India approved Ambuja Cements Limited's proposed acquisition of Orient Cement Limited through a two-step transaction: direct acquisition of 46.80% of issued share capital from promoters and certain public shareholders, followed by a mandatory open offer under the SEBI takeover regulations for additional shares of the expanded capital, which upon full acceptance would consolidate majority ownership; the parties' overlapping cement manufacturing activities and geographic footprints were provided as commercial context.