Kolkata-based Birla Corporation’s Rs 5,000-crore deal with Lafarge India to buy two cement units has gone sour, with the former planning to seek a legal solution.
In a regulatory filing with the BSE, the company said it “is in the process of taking appropriate legal measures in consultation with lawyers.” It claimed Lafarge had stated its “inability to proceed with the agreement.”
In August last year, the companies had struck a deal with an enterprise value of Rs 5,000 crore, whereby M P Birla group's flagship company was to acquire the integrated cement unit of Lafarge at Sonadih (Chhattisgarh) and a cement grinding unit at Jojobera (Jharkhand) along with Concreto and PSC brands.
These units, with cement capacity of 5.15 million tonnes per annum and mineral rights over adequate reserves of limestone, would have given Birla Corporation an edge in the business, helping it strengthen its position in the market.
According to the filing, Birla Corporation has “discussed the matter with its legal advisors and has decided not to accept their contention” before taking the call to sort out the matter legally.
When contacted by Business Standard, Birla Corporation refused to provide any details.
Lafarge-Holcim, however, confirmed that “it is no longer in discussion with Birla Corporation for the sale of Jojobera and Sonadih cement plants in eastern India”.
“The agreement with Birla Corporation was subject to approval by the Competition Commission of India (CCI) along with other regulatory approvals and customary conditions," the company said in response to an inquiry from this newspaper.
The legacy merger between Lafarge and Holcim received conditional clearance from CCI but required the new entity Lafare-Holcim to disinvest part of its assets to fulfil the norms.
“The group remains in dialogue with CCI and will communicate any further updates to the divestment process in India in due time,” Lafarge-Holcim said.