Birla Corp Pips Global Giants To Scoop Up Lafarge India's Eastern Assets For Rs 5000 Crore

By siliconindia | Monday, 17 August 2015, 11:17 Hrs

Transfer of Mining Rights still not clear

Birla Corp piped global majors like CRH and Heidelberg who were also the final shortlisted candidates in this transaction. The global giants were uncomfortable since there is lack of clarity on transfer of mining rights for mines that have not been auctioned as per the amended Mining Act that came into effect earlier this year, said sources directly involved. "Till now, there is no clarity on the subject even though CCI had asked Lafarge to carry out this divestment. It is difficult to take such risk in India without a clear directive from the government. As things stand today, Lafarge's limestone mines cannot be transferred and without that there is no value in the plants," said a senior industry official on condition of anonymity. Birla Corp's bid too is believed to be conditional to transfer of the mining lease.

Lafarge is hopeful that the government will intervene and help in the transfer of mines especially since it was a government regulator that had initiated this transaction.

Last April, Holcim and Lafarge, had announced a $44 billion dollar alliance to create the largest cement company. After an initial wobble, the merger got set earlier this year but both had to dispose assets from their global portfolio to meet regulatory approval for the merger. The Competition Commission of India (CCI) directed Lafarge to sell two of its assets as a precondition for giving a green light to the Indian leg of the transaction. India is a key market for the Lafarge-Holcim Group with a balanced portfolio in cement, aggregates, and ready-mix concrete. The combined group will have a cement capacity of around 68 million tonnes in India, largely on account of Holcim's sprawling operations through its local arms ACC and Ambuja.

Source: IANS