Lafarge’s India asset sees strong competition for its upcoming sale

A group of large multinationals and domestic players are competing with each other to land the Lafarge’s cement assets in India The Dollar Business Bureau

Development sources revealed that the auction for the 10.75 million Lafarge assets could happen in a month

A group of overseas cement companies, domestic players and private equity funds are competing with each other to bag India’s Lafarge cement assets sale. Many of the companies have submitted their expression of interest in their imminent sale. The probable applicants’ list includes - a notable industrial conglomerate in Latin America called Votorantim, the German multinational building materials company Heidelberg Cement, an Irish building materials company CRH plc, an American private equity fund group KKR, Indian conglomerates JSW and the Piramal Group and a private investment banking company the Blackstone Group. Development sources revealed that the auction for the 10.75 million assets could happen in a month, and former TPG executive Amol Jain and former Carlyle executive Rajeev Gupta have been asked to continue being advisors to Lafarge for the auction. Competition Commission of India directed Lafarge to dispose some of its assets last year. This directive came over trust issues that the company had with the Swiss major cement group Holcim, in April 2014. The concern of the CCI rose from the fact that Lafarge and Holcim would dominate the Indian market as each company produces a capacity of 68 metric tons per annum. While Lafarge had its dominance over eastern India, Holcim through its subsidiaries, ACC and Ambuja dominated over the remaining Indian states. In August 2015, CCI issued a contingent consent to Lafarge and its factories in eastern India to Birla corporation for Rs 5,500 crores. However, the deal did not see light due to a block on the limestone mining rights. Subsequently Lafarge submitted a revised proposal intending to sell its entire cement assets. Given the changed scenario, industry experts foresee an opportunity of vigorous bidding in the Indian cement industry where the growth rate is pegged at 8% per annum. Though there are some bidders from previous deals, the competition could get tough with the presence of giants like Votorantim and KKR. Taking a step further Heidelberg and CRH too are in the process of ramping up their capacities in India.

March 08, 2016 | 06:29pm IST.

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The Dollar Business Bureau - Mar 08, 2016 12:57 IST

Lafarge’s India asset sees strong competition for its upcoming sale

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