- LafargeHolcim says no longer in talks with Birla Corp. on deal
- Company planned unit sale to comply with antitrust regulations
Lafarge SA’s Indian unit has scrapped an agreement it signed last year to sell two of its cement units, prospective buyer Birla Corp. said in an exchange filing.
As part of global measures to comply with antitrust regulations when it was merging with Holcim Ltd., Lafarge had agreed in August to sell the two factories to the Kolkata-based conglomerate for a total enterprise value of 50 billion rupees ($735 million). Birla Corp. is part of India’s M. P. Birla group that markets jute, cotton yarns and flooring materials in addition to cement.
Lafarge “informed their inability to proceed with the agreement,” Birla Corp. said in an exchange filing in Mumbai on Tuesday. After consultation with lawyers, the company “has decided not to accept their contention and is in the process of taking appropriate legal measures,” it said.
A spokesman for LafargeHolcim Ltd. in Zurich said the company was no longer in discussion with Birla Corp. about the sale of the cement plants and will communicate any further updates on the divestment process in India in due course.
The units in Jojobera in the eastern Indian state of Jharkhand and Sonadih in Chhattisgarh have a total annual capacity of about 5.15 million tons and own “adequate reserves” of limestone, the raw material used to make cement, Birla Corp. said in August, adding it would fund the deal with some cash and incremental debt.
Birla Corp. shares have declined 15 percent since the two agreed on the deal, and today’s filing came after trading hours.
LafargeHolcim was formed in July and is now the world’s biggest cement maker with a market value of $25 billion.