Nirma to buy Lafarge India for $1.4 bn
The Dollar Business Bureau |
The world's biggest maker of cement, LafargeHolcim Ltd, said on Monday that it will sell its share in the Lafarge India to detergent and soap maker, Nirma Ltd, for an enterprise value of around $1.4 billion (Rs.9300 crores), in line with its divestment programme.
Lafarge India has three plants of cement and two grinding stations, which have a capacity to produce around 11 million tonnes per year. The company also sells aggregates and is one of India’s largest manufacturers of ready-mix concrete.
“LafargeHolcim Ltd announces that it has signed a letter of agreement with Nirma Ltd to divest its stake in Lafarge India for an enterprise value of about $1.4 billion,” Lafarge said in a statement.
‘The proceeds from the stake sale will be utilised to cut the company’s debt further,” it said.
LafargeHolcim Ltd will continue to have operations in the country through its arms, ACC Ltd and Ambuja Cements, which have a total cement production capacity of over 60 million tonnes and a distribution network that spreads across India.
Eric Olsen, CEO, LafargeHolcim Ltd, said that this deal is a major step in our divestment programme of 3.5 billion Swiss francs ($3.56 billion).
“With this deal, two-thirds of the programme has been secured and the remainder is well on track. We are confident that we will meet our target by the end of this year. With the proposed buyer we have found the right partner who will be able to develop the business further in the interest of all our stakeholders,” said Olsen.
However, the deal is subject to the nod of the Competition Commission of India (CCI).
The cement maker has a target to divest 3.5 billion Swiss francs in 2016. It has finished the sale of its businesses in South Korea and entered into a divestment agreement for its minority stake in Saudi Arabia.