LafargeHolcim has received a revised order from the Competition Commission of India (CCI) for the divestment of its interest in Lafarge India.
The divestment will include three cement plants and two grinding stations with a total capacity of around 11 million tonnes per annum.
On completion of the Lafarge and Holcim merger last July, the newly formed company agreed to divest sections of its business, to avoid an overriding market share. The proposed transaction is part of the company’s CHF 3.5 billion (US€3.59 billion) divestment target in 2016.
Eric Olsen, CEO of LafargeHolcim, said, “We will operate in India through our subsidiaries ACC Ltd and Ambuja Cements Ltd, with a combined cement capacity of around 63 million tonnes and a distribution network that extends across the entire country.
“We see opportunities to further build our business in India through our network of over 100,000 dealers and retailers, and by meeting the infrastructure needs of a country that is experiencing significant urbanisation.”
The conditional clearance by the CCI for an earlier divestment proposal was received in April 2015, including the divestment of Jojobera and Sonadih plants in Eastern India with a cement capacity of 5.1 million tonnes.
LafargeHolcim subsequently entered into a written agreement with Birla Corporation Limited, subject to CCI approval, in August 2015. However, due to the current regulatory issues relating to the transfer of mining rights captive and critical to the two plants, LafargeHolcim was told to submit an alternative solution to the CCI to ensure compliance with the order.
As a result, LafargeHolcim will now launch a new divestment process for Lafarge India.