Birla Corporation on Monday said it has agreed to buy two cement making units of Lafarge India Private Ltd — with a combined capacity of around 5.15 million tonnes — along with two cement brands for ₹5,000 crore.
The company said in a press release to the stock exchanges that the deal would be financed by its cash reserves and debt.
Lafarge India’s plant at Sonadih in Chhattisgarh and the Jojobera unit in Jharkhand and the brands Concreto and PSC were up for sale following a verdict from the Competition Commission of India (CCI).
CCI ruling The Commission had said that the global merger of Lafarge with Holcim would have the effect of creating a monopoly in India’s eastern region because of the scale of the combined capacities of the two entities.
Birla Corp’s deal would be subject to clearance by the CCI and other regulatory authorities, the company said.
“Upon completion of this transition, Birla Corp will consolidate its position in the eastern India cement market, where the demand-supply scenario and outlook continue to remain buoyant,” the company said.
Birla Corp, part of the MP Birla Group, has a current cement capacity of 10 million tonnes a year.
In the eastern region, it has two plants in West Bengal at Durgapur with a capacity of 0.6 mt of Portland Slag Cement and 1 million tonne Portland Pozzolana Cement (PPC).
It has five other plants, two each at Satna (Madhya Pradesh) and Chanderia (Rajasthan), and one at Rae Bareli (Uttar Pradesh). Birla Corp’s existing brands are Birla Cement Samrat, Chetak and Birla Premium Cement.
Captive power plants The company has a steel foundry unit at Satna, which manufactures castings for cement plants.
It also operates two coal-based captive power plants in Satna (27 MW) and Chanderia (29.8 MW).
Harsh V Lodha, Chairman of the Kolkata-headquartered company, said the transaction was “very important” for the company.
“The acquisition together with the Concreto and PSC brands, perfectly fits into our strategic vision and ambition of enhancing our competitiveness in our chosen markets,” he added.