Holcim, Swiss building materials giant, has now finalised its India restructuring plans with an overwhelming majority of votes from non-promoter minority shareholders of its subsidiary company Ambuja Cements. This is the first case, where according to SEBI’s new norms on M&A, that the listed entities need support of the majority of minority shareholders for a M&A to go through. The majority stakeholders do not vote. More than 68 per cent of the minority votes from institutions were in favour of the restructuring and the scheme of amalgamation while 32 per cent votes were against the resolution.
Large domestic institutional investors like LIC, reinsures General Insurance Corporation of India and several local shareholder-advisory firms however feel that the deal favours Holcim more than Ambuja’s minority shareholders, and were against the proposed restructuring. Holcim and Ambuja’s shareholding structure shows that several FIIs hold shares in both. FII may be less concerned about the cash outflow from Ambuja, the way many other Indian minority shareholders would be. This may have helped in swaying the votes in favour of restructuring. Holcim has been reitrating that the move will ensure long-term synergies, a cleaner corporate structure and a debt-free Ambuja post the restructuring.
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