Dalmia Bharat gets CCI nod to buy 15% stake in Dalmia Cement

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Dalmia Bharat has got fair trade regulator CCI's approval to acquire 15 per cent stake in its subsidiary Dalmia Cement Bharat from private equity giant KKR for over Rs 1,218 crore in a cash and stock deal.
Post the deal, Dalmia Cement Bharat Ltd (DCBL) will become a wholly-owned subsidiary of Dalmia Bharat Ltd (DBL).
Competition Commission of India (CCI) has cleared the proposed deal, as per information on the regulator's website.
The deal has earned KKR Mauritius Cement Investment a return of 2.4 times on its investment of Rs 500 crore that it made in September 2010.
"Dalmia Bharat Ltd (DBL) signed a definitive agreement with KKR, under which it will acquire KKR's 15 per cent stake in DCBL in return of KKR getting 8.5 per cent stake in DBL as well as Rs 600 crore in cash," Dalmia Bharat Group MD Punit Dalmia had said in January.

As per reports, DBL will make a preferential issue of 7.5 million shares to KKR at Rs 825 a share and pay KKR Rs 600 crore (USD 89 million) in cash for its around 15 per cent stake (about 3.79 crore shares) in DCBL.

With the agreement, KKR will be the largest institutional shareholder in DBL.
DBL provides management services to the group companies belonging to the Dalmia Bharat group, owns intellectual property such as trade names for its group companies and holds shares in the group companies, either on its own or through its subsidiaries.
DCBL is active in the cement manufacturing industry. It is also engaged in the manufacturing of refractories.

This was the first major deal in the cement sector after the government in January this year sought views from public on amending the Mines and Minerals (Development & Regulation) Act, 2015 to include provisions allowing transfer of captive mines granted through procedures other than auction.
CCI has the mandate to keep a tab on unfair business practices across sectors, while mergers and acquisitions beyond a certain threshold also require its approval.