German cement maker Heidelberg is consolidating its cement business in India by merging the unlisted Indorama Cement and holding company Heidelberg Cement India with Mysore Cements that it acquired in 2006.

Shareholders of Indorama Cement will receive 1.3544 equity shares of Mysore Cements for each equity share of Indorama, while Heidelberg will receive 0.1469 shares of Mysore Cements for every share of HeidelbergCement India.

Heidelberg holds 55 per cent stake in Mysore Cements.

Heidelberg also plans to increase combined cement capacity to 10-12 million tonnes by 2010-11, from the existing 2.8 million tonnes.

The expansion will place the company as the number three cement-maker, replacing India Cements, which has a capacity of 9 million tonnes.

''The idea is to draw up synergies and save costs, which will be beneficial to our shareholders as it will increase our EPS. It was odd to have an unlisted company and another public listed company,'' said Ashish Guha, managing director, Mysore Cements

The boards of the three companies have approved the plan at their board meetings last week.

Ashish Guha, managing director of Mysore Cement will head the merged entity. The merged entity will have a combined asset base of Rs800-900 crore.

Heidelberg will utilise the Rs250 crore cash surplus with Mysore Cements to expand its cement business.

Indorama Cement's plant is located in Raigad district in Maharashtra, while Mysore Cement's plants are situated in Madhya Pradesh, Uttar Pradesh and Karnataka.

The merger would help the group leverage its resources. The merged entity will have a turnover of Rs1,200 crore and EBITDA of Rs150 crore.

For the quarter ended in March 2008, Mysore Cement recorded a 17.02 per cent growth in net profits at Rs37.21 crore, as against Rs31.8 crore for the quarter ended in March 2007.

Net Sales climbed 24.81 per cent to Rs181.46 crore for the quarter ended March 2008 from Rs1454 crore for the quarter ended March 2007.

Mysore Cements Limited is a subsidiary of Cementrum I. B.V. ( a Company incorporated under the laws of The Netherlands, which is 100 per cent controlled by Heidelberg Cement AG).

HeidelbergCement, with its core products being cement, ready mixed concrete, aggregates and related activities, is one of the leading producers of building materials worldwide, and it employs around 46,000 people in more than 50 countries.