JSW Cement to merge with Shiva Cement, board approves 5:41 swap ratio

JSW Cement, a subsidiary of the JSW Group, announced plans to merge with its listed sister company, Shiva Cement. The merger aims to create a unified cement platform, enabling operational, financial, and management synergies. The board of JSW Cement approved a scheme of arrangement that includes the amalgamation of Shiva Cement into JSW Cement.

JSW Cement will issue 5 equity shares for every 41 shares held in Shiva Cement. The scheme must receive approvals from various regulatory bodies, including stock exchanges, SEBI, and other authorities. The merger is anticipated to be completed within 12-14 months, provided regulatory approvals are obtained in a timely manner. The integration will pool resources, including financial, managerial, technical, distribution, and marketing capabilities, to enhance operational efficiency.

Backward integration through Shiva Cement's clinker facility will also reduce dependence on external procurement. Financially, the merger promises enhanced funding flexibility, lower financing costs, and the elimination of inter-company guarantees. It will also eliminate administrative duplication and compliance requirements. JSW Cement CEO Nilesh Narwekar emphasized the strategic importance of the merger, stating that it will unlock operational and financial synergies, strengthen backward integration, simplify the corporate structure, and enable Shiva Cement's public shareholders to participate directly in the growth of a larger, more liquid listed entity.

JSW Cement currently holds a 66.23% stake in Shiva Cement, which has a cement grinding capacity of 24.10 MTPA and a clinkerisation capacity of 9.74 MTPA.