Paris: Cement maker LafargeHolcim said it would sell two plants in India to Birla Corporation for about 750 million Swiss francs ($768 million), as a condition of its recent merger.
Indian regulators still need to approve the sales. LafargeHolcim received conditional approval from the Competition Commission of India for its merger in April 2015.
The two cement units from Lafarge India have a capacity of 5.15 million tonnes per annum.
On Monday, Birla Corporation said in a BSE filing said "it has agreed to a transaction with Lafarge India Private Ltd, whereby Birla Corp, either directly or through its wholly-owned subsidiary, shall acquire both the Jojobera and Sonadih cement businesses (Acquisition business) from Lafarge India for an Enterprise
Value of Rs 5,000 crore".
Birla said it will acquire the cement business, comprising an integrated cement unit at Sonadih (Chhattisgarh), a cement grinding unit at Jojobera (Jharkhand), along with Concretoand PSC brands.
"Acquisition business has a cement capacity of 5.15 million tonnes per annum," it added.
The company said that upon completion of this transaction, Birla Corporation will consolidate its position in the eastern India cement market, where the demand supply scenario and outlook continue to remain buoyant.
LafargeHolcim said the proceeds would be used to reduce debt.
LafargeHolcim is selling the plants as part of plans to complete the integration of Lafarge and Holcim by the end of next year, following their merger.
The new company aims to save €1.4 billion ($1.55 billion) within three years as a result of the merger that formed the biggest cement producer in the world.
Commenting on the transaction, Birla Corporation chairman Harsh Lodha said: "The acquisition Business together with the Concreto and PSC brands, perfectly fit into our strategic vision and ambition of enhancing our competitiveness in our chosen markets."
The company said the transaction will be funded through exiting cash reserves and incremental debt, and is subject to approval of Competition Commission of India and other regulatory approvals.
KRISCORE Financial Advisors and SBI Capital Markets Ltd were financial advisors and Nishith Desai Associates acted as counsel to Birla Corp for this transaction.
Shares of Birla Corp were trading at Rs 520.60 apiece, up 14.94 percent from their previous close on BSE.
Reuters & PTI
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Updated Date: Aug 17, 2015 14:15:25 IST