LafargeHolcim, the largest cement producer in the world and the second-largest in India behind UltraTech Cement Ltd, has raised its holding in its two flagship local companies—ACC Ltd and Ambuja Cements Ltd—for around Rs 2,149 crore ($320 million).
LafargeHolcim bought a 4.2% additional stake in ACC for Rs 1,209 crore and around 2% in Ambuja Cements for Rs 940 crore, stock-exchange data showed on Tuesday.
The cement maker, which was created last year with the merger of Swiss firm Holcim and French peer Lafarge, bought the shares in bulk deals on the secondary market. A small chunk of ACC shares was acquired from a fund under Nomura.
LafargeHolcim held a 61.62% stake in Ambuja Cements as on 30 September, which increases to 63.62%.
It held a 0.29% stake directly in ACC, which becomes 4.5%. Ambuja Cements itself owns a 50.05% stake in ACC and so LafargeHolcim’s direct and indirect holding in ACC rises from around 31.1% to 36.3%.
This comes four months after LafargeHolcim struck a deal to divest assets previously under Lafarge India. LafargeHolcim had agreed to sell Lafarge India Pvt Ltd to Nirma Ltd for $1.4 billion (Rs 9,400 crore) including debt, in a deal to complete the India leg of the global merger of Lafarge and Holcim.
This deal was subject to approval by the Competition Commission of India (CCI). It was part of the company's 3.5 billion Swiss franc ($3.6 billion) divestment programme and was essential for completing the global merger announced last year between Lafarge and Holcim.
Lafarge India operates three cement plants and two grinding stations with a total capacity of around 11 million tonnes per annum. It also makes ready-mix concrete. After this divestment, LafargeHolcim will continue to operate in India through ACC and Ambuja Cements.
LafargeHolcim had been trying to sell Lafarge India for the past year after the CCI, in April 2015, asked the company to divest some assets to complete the global merger.
In August last year, Lafarge India struck a deal with Birla Corp to sell its cement plants at Jojobera in Jharkhand and Sonadih in Chhattisgarh for an enterprise value of Rs 5,000 crore. The two plants have a total capacity of 5.1 million tonnes. The deal, however, fell through as it was contingent on transfer of mining rights, which wasn't permitted under India law at the time.
LafargeHolcim then proposed an alternative plan. In February, it received a revised order from the CCI to offload its stake in Lafarge’s India operations.
This CCI order was challenged by Dalmia Cement (Bharat) Ltd in the Competition Appellate Tribunal, which stayed regulator's ruling. Dalmia later withdrew its petition.
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