February 27, 2018 / 5:16 AM / 19 days ago

Ambuja Cement, ACC shares fall after putting merger on hold

(Reuters) - Ambuja Cement Ltd slid as much as 4.8 percent and ACC Ltd fell as much as 2.2 percent after the companies said late on Monday that they were putting on hold a proposed merger.

A labourer takes a nap on stacked cement sacks of ACC on the outskirts of Allahabad June 22, 2012. REUTERS/Jitendra Prakash/Files

The companies cited “some constraints to implement a merger”, although they left the door open to one, saying it “remains the ultimate goal”.

They did not disclose any additional details. bit.ly/2CHSelD bit.ly/2CKSQat

Labourers stand after unloading cement bags from a freight train at Ghaziabad railway station on the outskirts of New Delhi, April 20, 2017. REUTERS/Adnan Abidi/Files

The two cement companies, owned by Swiss-based LafargeHolcim Ltd, added they had reached an agreement for the sale and purchase of materials and services with a view “to maximise synergies”.

ACC and Ambuja had announced last year they were considering a merger, without disclosing a value, to achieve operational and financial efficiencies.

“The development is sentimentally negative for both the companies, as it will have much lesser synergetic benefits than envisaged earlier,” retail brokerage Sharekhan wrote in a note.

Ambuja Cement shares clocked their biggest intraday fall since July 10, 2017.

Reporting by Krishna V Kurup in Bengaluru; Editing by Vyas Mohan

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