Engineering and construction major Larsen and Toubro (L&T) has sold its ready-mix-concrete (RMC) business to French cement major Lafarge for Rs1,480 crore ($349 million).
The sale includes the entire business along with all assets, liabilities and employees connected with the RMC business.
L&T, which fully exited the cement business now, plans to invest the sale proceeds in its core businesses, including power projects.
L&T had earlier exited its cement business through a demerger and sale to Grasim in the year 2004.
Lafarge, the world's second biggest cement maker after Holcim, said it plans to expand into emerging markets and establish its leadership in India.
The acquisition will give Lafarge 66 concrete plants, located in key markets such as Delhi, Kolkata, Mumbai and Bangalore, with a total estimated capacity of 4.1 million cubic metre in 2008, making it India's biggest ready-mix concrete company.
L&T, which supplies ready-mix concrete to almost all segments under the brand name L&T Concrete, has a market share of 25 per cent.
"With this acquisition, we are taking a pioneering step in the emerging Indian market," said Bruno Lafont, chairman and CEO of Lafarge. "With this acquisition, we are taking a pioneering step in the emerging Indian market," he added.
Lafarge's Switzerland-based rival Holcim, which owns ACC and Ambuja Cements in India, has a separate subsidiary to look after the RMC business under the name ACC Concrete.
Lafarge has its own ready-mix concrete business in Raipur, Chhattisgarh and this acquisition will help it offer value-added solutions for construction, the company said in a statement.
Lafarge has three cement plants in India - two in Chhattisgarh and a grinding unit in Jharkhand – and a current production capacity of 5.5 million tonnes. It plans to more than double its capacity and expand presence in five years.
Lafarge entered India in 1999 when it bought Tata Steel's cement division, followed by the acquisition of the Raymond Cement facility in 2001.