Lafarge buys L&T concrete unit for $349 mn

Lafarge, the world’s second-largest cement maker, has acquired Larsen and Toubro’s (L&T) Ready Mix Concrete (RMC) business for $349 million (Rs 1,480 crore). The deal will help Lafarge access L&T’s 66 plants and also make it the country’s largest RMC maker.Leading cement manufacturers Holcim, AV Birla Group and Heidelberg were also in the race to buy the business.

Lafarge has routed the acquisition through its building material firm Lafarge Aggregates & Concrete. A formal announcement is expected on Thursday. Lafarge is believed to have informed the Paris stock exchange. Lafarge India is not a listed entity.JM Financial advised Lafarge on the transaction, while Citigroup Global Markets advised L&T.

Each unit of L&T Concrete has a capacity to produce 5,000-6,000 cubic metres of concrete a month, while the total capacity is estimated to be around 3-4 million cubic metres per annum. RMC is widely used in the building and construction industry in India, where L&T has a 25% market share.

Read more in The Economic Times article.

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Lafarge leads race for L&T Concrete

Lafarge leads race for L&T Concrete

French cement major Lafarge SA, the world's second-largest cement maker, has emerged the frontrunner in the race to acquire the ready-mix concrete (RMC) business of engineering and construction major Larsen & Toubro (L&T).

The construction giant sold its cement business to the Birlas in 2003, now UltraTech Cement, but retained the RMC division. The company is the leader in the RMC segment with a market share of 25 per cent. The revenue is Rs 1,000 crore annually.

In December last year, L&T had decided to hive off its RMC business into a separate entity called L&T Concrete. The company's plans to hive off its non-core businesses.
L&T has 66 RMC plants across the country with an overall annual installed capacity of around 4 million cubic metres.Industry analysts said RMC constitutes 3 per cent of the total cement business at present, but the growth opportunities are enormous with spending on infrastructure on the rise.

Lafarge entered the Indian market in 1999, with the acquisition of Tata Steel's cement business. This acquisition was followed by the Raymond Cement facility in 2001.Swiss cement major Holcim was also in the race as both cement firms see this business as the future of the cement industry.

Read more in The Business Standard article.

Holcim buys 11% more in ACIL at Rs 589 cr

Swiss cement giant Holcim has decided to take complete control of Ambuja Cements India (ACIL), the local company through which it controls ACC, India’s largest cement major. Holcim will buy 11% from Ambuja Cement (ACL), formerly Gujarat Ambuja, for Rs 588.91 crore.Ambuja Cement, which created ACIL in 2000 and offered stakes to the Government of Singapore and American International Group (AIG) in what was then the country’s largest private equity transaction, will now completely exit the company.

The move will enable Holcim to own 100% of an entity that owns stakes in two of India’s largest cement players. ACIL controls 42.88% in ACC, India’s largest cement maker with a 13% market share.ACIL also owns 9.9% in Ambuja Cement, the third-biggest cement-maker with a 10% market share. Holcim directly owns 36% in Ambuja Cement.

Ever since French giant Lafarge bought Tata Steel’s cement plant in 1998, India’s growing cement industry — currently world’s second-largest — has long attracted global cement giants. Since then, both Lafarge and Holcim have expanded their presence here, with the aggressive Holcim garnering a large chunk of the market.

Read more in The Economic Times article.