ACC Limited and Ambuja Cements – the two Indian units of building materials manufacturer LafargeHolcim – have decided to explore a merger, PTI reported on Saturday. The step is aimed at combining the strengths of both businesses to benefit all stakeholders, the two companies said in separate statements.

Both cement firms have set up a special committee of directors – most of whom are independent directors – to begin examining a possible merger. Stating that no decision has been made yet, the companies said their respective boards will decide on the move based on the recommendation of the special and audit committees.

If the proposed merger goes through, the combined entity will have a turnover of more than Rs 20,425 crore based on their respective revenues in 2016. The Mumbai-based ACC, which follows the January-December financial year, reported revenue of Rs 11,158.34 crore in 2016. The Gujarat-based Ambuja cement, which also follows the same financial year system, had posted a revenue of Rs 9,267.82 crore the same year.

The new venture will have a production capacity of 63 million tonnes per annum and become the second-largest cement producer in India after Ultratech Cement, which has an installed capacity of 69.3 MTPA. Currently, Ambuja Cement has a capacity of 29.65 MTPA with five integrated plants and eight cement grinding units across the country. ACC, on the other hand, has a total capacity of 33.41 MTPA with 17 cement factories.

Both ACC and Ambuja Cements became parts of the Holcim group in 2005. Following the merger of Holcim Limited with Lafarge SA in 2015, a new entity LafargeHolcim was created to become the world’s largest cement producer.