Birla Corporation, flagship firm of the M P Birla Group, today said it will take legal action against Lafarge India over the firm’s “inability” to go ahead with the deal to sell its Jojobera and Sonadih cement plants.
In August last year, both firms had signed an agreement through which Birla Corporation was to acquire Jojobera and Sonadih cement businesses from Lafarge India Pvt Ltd (LIPL) for an enterprise value of Rs 5,000 crore.
In a regulatory filing, Birla Corporation said: “LIPL has since informed their inability to proceed with the agreement.
The company has since discussed the matter with its legal advisors and has decided not to accept their contention and is in the process of taking appropriate legal measures in consultation with lawyers.”
The firm did not specify reasons behind LIPL expressing its inability to complete the deal.
Birla Corp was to acquire LIPL’s cement business, which comprises an integrated cement unit at Sonadih (Chhattisgarh), a cement grinding unit at Jojobera (Jharkhand), along with Concreto and PSC brands.
The acquisition would have added an additional cement capacity of 5.15 million tonnes per annum (MTPA) to Birla Corp’s kitty and would have helped the firm consolidate its position in the eastern India cement market.
The firm has a total operational cement capacity of about 10 MTPA with units in Rajasthan, Madhya Pradesh, Uttar Pradesh and West Bengal.
Shares of Birla Corporation today fell by 3.55 per cent to settle at Rs 387.20 apiece on the BSE.