Tribunal stays Lafarge’s India asset sale


  • 14 Apr 2016

The Competition Appellate Tribunal has stayed Lafarge India Pvt Ltd's sale of its cement capacity of 11 million tonnes, in a setback to the global merger between French cement giant Lafarge and Swiss building materials firm Holcim.

The order came on an appeal by Dalmia Cement (Bharat) Ltd against a Competition Commission of India (CCI) decision to approve an alternative plan proposed by LafargeHolcim, the combined global entity, to complete the India leg of the merger. The world's biggest cement maker had proposed the alternative plan after an initial plan fell through.

Dalmia Cement, however, contended that the Competition Act, 2002, had no provision that permitted the CCI to accept an alternative proposal in a merger case after the antitrust regulator had finalised the terms of the combination.


The tribunal, headed by retired Supreme Court judge and chairman G.S. Singhvi, stayed the CCI's February 2 decision and issued a notice to the regulator that it must respond to by May 9. 

According to media reports, private equity giant Blackstone Group and cement maker JSW are among the firms that had expressed interest in buying Lafarge India's assets.

In April 2015, the CCI had asked LafargeHolcim to divest some assets to complete the merger. In August, Lafarge India struck a deal with Birla Corp to sell its cement plants at Jojobera in Jharkhand and Sonadih in Chhattisgarh for an enterprise value of Rs 5,000 crore. The two plants have a total capacity of 5.1 million tonnes. 


The deal, however, fell through as it was contingent on transfer of mining rights, which wasn't permitted under Indian law at the time.

LafargeHolcim then proposed an alternative plan. In February, it received  a revised order from the CCI to offload its stake in Lafarge’s India operations that include three cements factories and two grinding plants. It is this CCI order that Dalmia had challenged in the tribunal.

Besides Lafarge India's cement plants, Holcim also owns controlling stakes in cement makers ACC Ltd and Ambuja Cements Ltd with a total capacity of around 63 million tonnes. The combined entity will be the second-largest cement maker in India after UltraTech Cement Ltd completes a $2.4 billion deal to acquire two-thirds of Jaiprakash Associates Ltd's cement business.


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