JSW Cement Board Approves Merger of Shiva Cement to Create Unified Platform

JSW Cement Limited announced that its Board of Directors, along with its listed subsidiary Shiva Cement Limited, has approved a scheme of arrangement for the amalgamation of Shiva Cement into JSW Cement. This strategic consolidation aims to establish a single, unified cement platform to unlock significant operational, financial, and management synergies.

The key strategic rationales behind this proposed amalgamation include achieving business synergies by pooling resources for operational efficiency, optimizing raw material procurement through backward integration via Shiva Cement's clinker facility, and enhancing financial synergies through improved funding flexibility and lower financing costs. The merger is also expected to enhance shareholder value by providing future scalability and operational efficiency, with public shareholders of Shiva Cement gaining direct shareholding in a larger, more liquid entity. Furthermore, it will simplify the corporate structure by reducing administrative duplications and compliance requirements.

Under the terms of the scheme, JSW Cement will issue 5 equity shares of face value ₹10 each for every 41 equity shares of face value ₹2 held in Shiva Cement to the shareholders of Shiva Cement (excluding JSW Cement itself). The amalgamation is subject to the receipt of requisite approvals from stock exchanges, SEBI, the National Company Law Tribunal (NCLT), and other relevant statutory and regulatory authorities, as well as the approval of the respective companies' shareholders and creditors. The transaction is anticipated to be completed within 12-14 months, contingent upon the timely receipt of all regulatory approvals.

Mr. Nilesh Narwekar, CEO of JSW Cement, stated that the merger is a strategic step towards creating a more integrated and efficient business, strengthening backward integration, and simplifying the corporate structure. He highlighted that it would enable Shiva Cement's public shareholders to participate directly in the growth of a larger and more liquid listed entity. The announcement also detailed the independent advisors for the transaction, including JM Financial Limited as the exclusive financial advisor, and acknowledged the roles of Price Waterhouse & Co LLP, PwC Business Consulting Services LLP, BDO Valuation Advisory LLP, SBI Capital Markets Limited, and DAM Capital Advisors Limited.