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    No tax liability, indemnity in sale of Ambuja Cements, ACC to Adani Group: Holcim

    Synopsis

    The new buyers of Ambuja Cement and ACC will be liable for the anti-trust fines against the two companies which are presently being litigated in the Supreme Court of India, according to Holcim Group. “It's a straightforward sale of the shares. There is no further indemnification from our side,” Jan Jenisch, the chief executive officer of Holcim told analysts on Monday.

    Watch: How will Adani buying ACC, Ambuja stake for $10 bn impact overall cement space?
    There will be no indemnity or tax liability for the Switzerland-based Holcim Group in its $6.4 billion transaction to sell its stake in Ambuja Cement and ACC to the Adani Group, the company said in an analyst call on Monday.

    The new buyers of Ambuja Cement and ACC will be liable for the anti-trust fines against the two companies which are presently being litigated in the Supreme Court of India, according to Holcim Group.

    “It's a straightforward sale of the shares. There is no further indemnification from our side,” Jan Jenisch, the chief executive officer of Holcim told analysts on Monday.

    The two companies were found guilty of cartelization along with multiple other cement companies in a 2016 investigation by the Competition Commission of India (CCI). Ambuja Cements was fined Rs 1,164 crore while ACC was fined Rs 1,148 crore.

    The two companies challenged the order in two appellate authorities which ruled against them. They have now moved the Supreme Court and judgement is awaited.

    The Holcim Group said that the transaction with the Adani Group will also be tax free in India and they will have no issues taking the capital out of the country.

    “According to our analysis, it is a tax-free transaction. Never know if any complication arises but we assume we will get the 6.4 billion Swiss francs as net proceeds,” Jenisch said.

    The Swiss company's management further said that choosing the Adani Group as the buyer of its India assets will also ensure a smooth transaction, given the latter has negligible prior interests in the cement industry and is unlikely to run afoul of competition laws.



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