Holcim and Lafarge may need to dispose of certain assets in India to secure clearance for their merger from India's competition watchdog
India's competition watchdog will likely prescribe that global cement giants Holcim and Lafarge make a "structural remedy" to their proposed merger arrangement in order to get the Competition Commission of India's (CCI) clearance for their merger. The Economic Times cited an undisclosed senior official in the Indian government to report on the matter.
Holcim and Lafarge's global merger requires approval from regulators across multiple countries, including India, whose competition authority has already placed the proposal up for public scrutiny. According to the report, Holcim operates in the country through subsidiaries Ambuja Cements and ACC, while Lafarge operates in India through Lafarge Aggregates & Concrete and Lafarge India.
As per the report, a "structural remedy" would normally involve a request for companies to sell certain assets, so as to reduce the impact their merger would have on the market. Also, according to the same government source cited earlier, both Lafarge and Holcim will need to submit a list of plants -- both assets and operations -- that would need to be divested as part of their merger agreement.
However, the item also noted that in their joint filing with the CCI, Holcim and Lafarge had said they anticipate that the will meet intense competition from incumbent players in India's cement space. adding that the Indian market is characterized by having "excess capacity" and would therefore hinder their merged entity's ability to raise prices.
Source The Economic Times