The proposed deal by Birla Corporation Ltd to acquire two cement manufacturing units of Lafarge India Private Ltd (combined capacity of around 5.15 million tonnes) along with Lafarge’s two cement brands for Rs 5,000 crore is off.
Birla Corporation on Tuesday in a filing to the stock exchanges said Lafarge India informed “their inability to proceed with the agreement.” The acquisition deal was signed in August last year.
Birla Corporation further said that it “decided not to accept their contention and is in the process of taking appropriate legal measures in consultation with lawyers”.
The Lafarge India’s plant at Sonadih in Chhittsgarh and the Jojobera unit in Jharkhand and the brands Concerto and PSC were up for sale following a verdict from the Competition Commission. The Commission had ruled that giving effect to global merger of Lafarge with Holcim in India would lead to monopoly in the eastern region because of the scale of the combined capacities of the two entities.
The MP Birla Group company, Birla Corporation has a current cement capacity of 10 mt a year. In the east, 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 Raebareli (Uttar Pradesh). Birla Corporation’s existing brands are Birla Cement Samrat and Chetak as well as Birla Premium Cement.
It has a steel foundry unit at Satna to manufacture castings required by cement plants. It also operates two coal-based captive power plants at Satna (27 MW) and Chanderia (29.8 MW).
The disclosure was uploaded by BSE after market hours. The Birla Corp stock closed on Tuesday at Rs 387, 3.55 per cent down on the BSE.