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Mumbai - Lafarge SA’s Indian unit has scrapped an agreement it signed last year to sell two of its cement units, prospective buyer Birla said in an exchange filing.
As part of global measures to comply with antitrust regulations when it was merging with Holcim, Lafarge had agreed in August to sell the two factories to the Kolkata-based conglomerate for a total enterprise value of 50bn rupees ($735m).
Birla is part of India’s MP Birla group and markets jute, cotton yarns and flooring materials besides cement.
Lafarge “informed their inability to proceed with the agreement,” Birla said in an exchange filing in Mumbai on Tuesday. After consultation with lawyers, the company “has decided not to accept their contention and is in the process of taking appropriate legal measures,” it said.
Vaijayanti Karande, a Mumbai-based spokesperson for Lafarge, wasn’t immediately available to comment.
The units in Jojobera in the eastern Indian state of Jharkhand and Sonadih in Chhattisgarh have a total annual capacity of about 5.15 million tons and own “adequate reserves” of limestone, the raw material used to make cement, Birla said in August, adding it would fund the deal with some cash and incremental debt.
Birla shares have declined 15% since the two agreed on the deal, and today’s filing came after trading hours.
LafargeHolcim was formed in July and is now the world’s biggest cement maker with a market value of $25bn.
