MUMBAI Birla Corporation Ltd (BRLC.NS), whose business interest include jute and cement, plans to take legal action against the Indian unit of LafargeHolcim LHN.VX after a pact to buy some of the assets of the Swiss-French cement giant fell through.
In April, LafargeHolcim agreed to divest two of its Indian plants to win approval from the local anti-trust regulator to merge Indian assets of France's Lafarge and Switzerland's Holcim.
Birla Corp said in August it had entered into an agreement with Lafarge India Private Ltd to buy the two cement businesses in eastern India for an enterprise value (equity plus debt) of 50 billion rupees ($735 million).
On Tuesday, Birla Corp said in a notice to the Bombay Stock Exchange that it had now been informed about Lafarge India unit's "inability to proceed" with the transaction. The Indian company did not elaborate.
"The company has since discussed the matter with its legal advisors and has decided not to accept their contention and is in the process of taking appropriate legal measures in consultation with lawyers," it said.
The deal to acquire the two plants would have taken Birla Corp's cement production capacity to over 15 million tonnes per annum, with a strong presence in the eastern part of India, up from about 10 million tonnes now.
LafargeHolcim confirmed in a statement it was no longer in talks with Birla Corp for the divestment of the Jojobera and Sonadih cement plants in eastern India. It said it would inform the local anti-trust regulator about the divestment process.
($1 = 67.9982 rupees)
(Reporting by Promit Mukherjee; Editing by Sumeet Chatterjee and Mark Potter)
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Published Date: Feb 03, 2016 01:15 AM | Updated Date: Feb 03, 2016 01:15 AM