LafargeHolcim has entered into an agreement with Nirma Limited to sell its 11 million tonne cement capacity in India at an enterprise value of about $1.4 billion (about ₹9,400 crore).
The deal is subject to approval by the Competition Commission of India, said LafargeHolcim in a statement on Monday.
Lafarge India operates three cement plants and two grinding stations largely catering to the eastern India. The company also markets aggregates and is one of India's leading ready-mix concrete manufacturers. The proceeds from the divestment will be used to reduce debt further, said LafargeHolcim.
Headquartered in Gujarat, diversified conglomerate Nirma has business interest across industrial and consumer products ranging from soaps, detergents, salt, soda ash, caustic soda, cement, packaging and other household products.
With over 12 manufacturing facilities in India and the USA, Nirma registered sales of over $ 1.1 billion in FY’16.
Eric Olsen, CEO, said this agreement is an important step in our CHF 3.5 billion divestment program.
“With this deal, two thirds of the program (leading to global merger of Holcim and Lafarge) has been secured and the remainder of the program is well on track. We are confident that we will meet our target by the end of this year,” he said.
With the proposed buyer we have found the right partner who will be able to develop the business further in the interest of all stakeholders, he added.
LafargeHolcim will continue to have presence in India through its subsidiaries ACC and Ambuja Cements with a combined cement capacity of over 60 million tonnes and a distribution network that extends across the entire country.
LafargeHolcim has a divestment target of CHF 3.5 billion in 2016 and has already completed the sale of its business in South Korea and signed an agreement to divest its minority shareholding in Saudi Arabia. The Group has also expanded its joint-venture with SNI, its historical partner in Morocco, by merging Lafarge Ciments Maroc and Holcim Maroc to create LafargeHolcim Maroc, it said.