Dalmia Cements Ltd on Monday withdrew a challenge to a conditional approval given by India’s anti-trust regulator to the proposed merger of cement makers Lafarge and Holcim in India.
The Competition Appellate Tribunal accepted Dalmia Cement’s decision, paving the way for the sale of Lafarge India’s 11 million tonnes per annum (mtpa) of cement capacity as part of the merger conditions approved by the Competition Commission of India (CCI).
Ramji Srinivasan, a counsel for Dalmia Cement, informed the tribunal about the firm’s decision to withdraw its plea. “In view of the recent developments, amendment to the Mines and Minerals (Development and Regulation) (Amendment) Bill, 2016, passed by both Houses of the Parliament regarding transfer of proposed licences, we would like to withdraw our plea,” Srinivasan told the tribunal.
On 2 May, the Rajya Sabha approved an enabling legislation to make it easier for mergers and acquisitions of steel and cement firms that are facing a tough time because of a fall in global commodity prices.
The Lok Sabha has already approved the proposed law—The Mines and Minerals (Development and Regulation) (Amendment) Bill, 2016. It now needs the President’s nod. Once it becomes law, it will facilitate mergers and acquisitions as there will be no bar on the transfer of mining leases.
France’s Lafarge and Holcim of Switzerland merged in July last year to form the world’s largest cement firm, LafargeHolcim. The combined entity has, however, struggled to get approval from competition regulators in some countries. “LafargeHolcim is happy Dalmia has withdrawn their appeal to the Competition Appellate Tribunal and look forward to completing the sale of Lafarge India expeditiously in accordance with the CCI order,” a spokesperson for Lafarge India said.
In order to fulfil merger conditions, CCI had asked LafargeHolcim on 2 February to sell some of its assets while approving its new divestment plan which included the sale of three cement plants and two grinding stations of Lafarge India with a total capacity of around 11 mtpa.
Following the CCI order, the firm went ahead and invited bids for the sale.
On 5 April, rival Dalmia Cements filed an appeal against the CCI order. The sale process was temporarily stayed by the competition tribunal on 13 April.
LafargeHolcim’s India presence comprises cement capacity held under three subsidiaries: Lafarge India Pvt. Ltd, ACC Ltd and Ambuja Cements Ltd. After the divestment of Lafarge’s 11 million tonnes, the merged entity would have a total capacity of about 60 million tonnes.