New Delhi/Zurich: Swiss multinational cement giant LafargeHolcim has got fair trade regulator CCI's go-ahead for a new divestment plant for its India business including three cement plants and two grinding stations.
The proposed divestment is key to get the approval of the Competition Commission of India (CCI) for the multi-billion dollar merger between Lafarge and Holcim announced last year.
The revised plan was announced by the behemoth last week after another transaction proposed earlier fell apart under which it was to sell two cement plants in India to Birla Corp.
In a statement, LafargeHolcim said it has received a revised order from CCI for the divestment of its interest in Lafarge India, including three cement plants and two grinding stations with a total capacity of around 11 million tonnes per annum.
The company also markets aggregates and is one of India's leading ready-mix concrete manufacturers.
"The proposed transaction is an alternate remedy for the merger of the group's legacy companies and now forms part of the company's 3.5 billion swiss franc divestment target in 2016," it added.
LafargeHolcim CEO Eric Olsen 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 1,00,000 dealers and retailers, and by meeting the infrastructure needs of a country that is experiencing significant urbanisation."
The company had got a conditional clearance from CCI in April 2015 for its earlier divestment proposal, 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 letter agreement with Birla Corporation, 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 obliged to submit an alternate remedy to the CCI to ensure compliance with the order," it said.
As a result, LafargeHolcim will now launch a new divestment process for Lafarge India. The Birla deal was estimated at around Rs 5,000 crore and the revised divestment could be worth more than that, as it involves three cement plants and two grinding stations.
The revised divestment would also require CCI's approval. LafargeHolcim was formed in July and is now the world's biggest cement maker with a market value of USD 25 billion.
Earlier this month, Birla Corp had 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.