Post-Merger Reaction: Ambuja, Orient Soar Nearly 10%, ACC Slips — Broker Takeaways

Ambuja–ACC–Orient Cement Merger: Ambuja, Orient Rally on Broker Cheer; ACC Slips.

Shares of Ambuja Cements and Orient Cement surged on December 23 after brokerages struck a bullish note following board approvals for a merger involving the three Adani Group cement companies. ACC, however, traded lower.

Ambuja Cements climbed over 4% to Rs 563.50, its highest level in more than a month, while Orient Cement jumped nearly 10% to around Rs 179, also hitting a one-month high. Both stocks extended gains for a third straight session.
In contrast, ACC fell nearly 2% to about Rs 1,752 in morning trade.

Merger details

Under the proposed scheme, ACC shareholders will receive 328 shares of Ambuja Cements for every 100 shares of ACC, while Orient Cement shareholders will get 33 Ambuja shares for every 100 Orient shares. The record date for the merger is yet to be announced.

What brokerages say

Morgan Stanley maintained an ‘Overweight’ rating on Ambuja Cements with a target price of Rs 650, implying over 20% upside. The brokerage said the swap ratios are neutral for ACC minorities and positive for Orient Cement shareholders, adding that merger synergies could deliver cost savings of at least Rs 100 per tonne and simplify the group’s listed structure.

CLSA said the amalgamation could lead to around 10% value accretion. It retained an ‘Outperform’ rating on Ambuja with a target of Rs 680, while maintaining a ‘Hold’ on ACC with a target price of Rs 2,035.

Emkay said the deal appears largely neutral, with a slight negative bias for ACC and mildly positive for Orient Cement.
JPMorgan said Ambuja’s expanded pan-India footprint should help optimise costs and boost sales of higher-margin premium brands, noting that both Ambuja and ACC brands will continue post-merger.