LafargeHolcim sells India cement business to Nirma

LafargeHolcim has entered into an agreement with Nirma to sell its Indian cement assets for USD 1.4 billion (Rs 9398 crore). Meanwhile, the company is awaiting approval from Competition Commission of India (CCI) for the divestment of its interest in Lafarge India. Lafarge India operates three cement plants and two grinding stations with a total capacity of around 11 million tonnes per annum. Lafarge India will utilise funds from divestment to reduce debt level of the company. Arpwood Capital and Citibank are advising LafargeHolcim on the transaction.

Meanwhile, the company clarified that LafargeHolcim will continue to operate in India through its subsidiaries ACC and Ambuja Cements with a combined cement capacity of more than 60 million tonnes.

Nirma has annual turnover of Rs 7000 crore. The company is cash rich and has EBITDA of Rs 1400 crore. The purchase of the 11 million tonnes in cement assets will help the company convert into a prominent cement producer. It already has 2 million tonne cement capacity in Rajasthan and they are putting up a new capacity in Gujarat.

Nirma Group is trying to become a commodity conglomerate. The company has acquired large sized soda ash company in the US and they are very keen to expand in the cement space.

During first week of July, Jaiprakash Associates agreed to sell 21.2 million tonnes of cement assets to Ultratech Cement for Rs 16189 crore. Ultratech Cement will also pay an additional Rs 470 crore for Jaiprakash Associates’ under-construction grinding units.