Cementing a deal: Holcim-Lafarge merger can go ahead, says CCI

Cementing a deal: Holcim-Lafarge merger can go ahead, says CCI

• Representational image File Photodna Research & Archives

Fair trade watchdog CCI has given its green signal for the Holcim-Lafarge merger deal that would create the world’s largest cement group, while directing Lafarge to sell its two plants in India to address anti-competition concerns.

The $40 billion-deal, which a few weeks ago was on the verge of even falling apart, was also the second instance where the CCI sought public comments to assess the anti-competition nature of the transaction.

After an intense scrutiny, CCI has ordered Lafarge to divest its plants in Jharkhand and Chhattisgarh in order to effectively eliminate “appreciable adverse effect on competition” due to the proposed deal.

Swiss major Holcim and French entity Lafarge have presence in the country through their indirect subsidiaries.

The Competition Commission of India’s (CCI) approval has come after the first notice was given by the two companies in July 2014.

The Jojobera plant has a cement grinding capacity of 4.6 MTPA (million tonnes per annum) while the unit at Sonadih in Chhattisgarh has a cement grinding capacity of 0.55 MTPA besides a clinker capacity of 3.10 MTPA.

In the process of deciding on the divestiture proposal, the Commission considered various combinations of plants located in Jharkhand, West Bengal and Chhattisgarh forming part of the relevant market.

To assess the deal, the Commission identified the relevant markets for grey cement and RMC (ready mix concrete).

With regard to grey cement, CCI considered Eastern region — comprising the states of Chhattisgarh, Odisha, West Bengal, Bihar and Jharkhand — as the relevant geographic market.

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