Read on ................................... % Bizness & esides, being in constant touch with the world (especially the US), the latest generation of the Indian business families have developed different attitudes. Some of the Dalmias have become venture capital/private equity players. We don’t know what the new generation of Neorias and Sekhsarias who created the Gujarat Ambuja group will do. But certainly their exit from ACC has been nothing short of stunning and may signify the changing mindset of Indian business. This will have profound implications. It will be worthwhile to recall Gujarat Ambujas ACC sellout A critical analysis Mergers and Acquisitions It signifies a maturing of Indian families and their more global outlook There was a time when government controls were strong, capacity additions were scarce, joining the family business was the only thing a businessman’s son could think of. Family control was paramount. Then India opened and more capacities came in, but many of them had to be sold off to stronger players. The Bombay Club raised the alarm that India will be bought over by foreigners and it too fell by the wayside. Indian businessmen began to loosen up a bit about the ownership and control issue. - KenSource that GACL paid a price of Rs 370 a share to buy Tatas’ stake in ACC and in doing so it bend the rules of takeover to avoid making an open offer, convinced the regulator about it, went to court to defend that position while to financial institutions it showed ACC as part of the group. After stretching both its finances and governance notions, it has just sold off its ACC stake to Holcim of Switzerland while talking of a strategic alliance with it. Holcim is bringing in $800 million into Ambuja Cement India Ltd (ACIL) an investment company, which is holding the shares of ACC and Ambuja Cement Eastern Ltd (ACEL). Of this, $200 million will be used to buy out 40% stake of private equity investors. Next, Holcim will pick up further 27% in ACIL, raising its stake to 67%. Gujarat Ambuja will hold the balance 33%. Then ACIL will make an open offer to raise its stake in ACC from 13.89% to 50.01% and in ACEL to 100%. If the open offer goes through, Holcim will end up holding a 33.51% in ACC and 67% in ACEL, through its 67% stake in ACIL. This is a clear sellout by Gujarat Ambuja’s promoters. They have sold off Ambuja Eastern and also their control over ACC for which they had overpaid and fought hard to legalise it with the help of a battery of lawyers. But they have attempted to give a spin to all this by talking strategic alliance. When asked why GACL decided to have this arrangement with an MNC like Holcim instead of consolidating its hold on ACC, Anil Singhvi, the CFO came out with elaborate arguments. Let us summarise these and see how valid these were. Private Equity Exits: GACL had sold 40% to private equity players who needed to exit. GACL had four options, according to Singhvi. One, keeping its stake at 13.8% would have meant that Gujarat Ambuja would have had to shell out around $170 million (about 2.5 times its free cash flow in FY04) to buy out the private equity investors. It claims that it did not have the money. Two, cede control to private equity investors, which was not desirable. Three, get new private equity investors but eventually that was not really a *