Synopsis: Andhra Cements will merge with Sagar Cements through a share-swap deal, with shareholders receiving 29 Sagar Cements shares for every 98 Andhra Cements shares. The merger aims to improve efficiency, reduce costs, and strengthen the combined company’s market position.
The shares of this company are one of the oldest cement manufacturers in India, primarily engaged in the production and sale of cement are in the spotlight after it rose by 8 percent in today’s session following board approval with Sagar Cements.
With a market capitalisation of Rs. 511 cr, the shares of Andhra Cements Ltd were trading at Rs. 55.50 per share, surging 8% in today’s market session, making a high of Rs. 58.70, up from its previous close of Rs. 54.43 per share.
Andhra Cements to Merge with Sagar Cements
The board of Andhra Cements Ltd (ACL) has approved a Scheme of Amalgamation under which the company will merge with its parent company, Sagar Cements Ltd (SCL). The proposal was approved by the board on June 5, 2026, and is subject to approvals from shareholders, creditors, SEBI, stock exchanges, and the National Company Law Tribunal (NCLT).
The merger will be carried out through a share swap and not through any cash payment. Under the approved scheme, shareholders of Andhra Cements (other than Sagar Cements) will receive 29 equity shares of Sagar Cements for every 98 equity shares held in Andhra Cements. The swap ratio has been recommended by BDO Valuation Advisory LLP and validated through a fairness opinion issued by Anand Rathi Advisors.
Why Are the Companies Merging
Sagar Cements currently owns 75% of Andhra Cements and both companies operate in the cement business. The merger is aimed at creating a unified corporate structure, enabling complete control over operations, improving efficiency, eliminating duplication of functions, and achieving better business synergies. The combined entity is also expected to benefit from centralized decision-making, stronger branding, and optimized utilization of resources.
The merged entity is expected to gain from economies of scale, improved procurement efficiency, better supply chain management, expanded distribution reach, and stronger market positioning. Management believes the integration will enhance operational efficiency, reduce costs, improve resource allocation, and support long-term growth opportunities for shareholders of both companies.
The merger is not yet final and will become effective only after receiving all necessary regulatory and shareholder approvals. Once completed, Andhra Cements will be absorbed into Sagar Cements, simplifying the group’s structure and creating a single, larger cement business.
Andhra Cements Ltd is one of the oldest cement manufacturers in India, primarily engaged in the production and sale of cement. The company operates integrated cement manufacturing facilities and serves key markets across South India. Andhra Cements is a subsidiary of Sagar Cements Ltd, which holds a majority stake in the company.
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