Competition panel begins second review of Holcim-Lafarge merger deal

The Competition Commission of India (CCI) has started a public scrutiny of the proposed merger between global cement giants Holcim of Switzerland and France's Lafarge, as the commission found prima facie violation of competition norms in the proposed merger.

The fair trade regulator had, on 14 July 2014, received a notice from Holcim Limited and Lafarge SA in relation to the proposed merger of equals through an exchange offer resulting, upon completion, in the acquisition by Holcim of all the outstanding shares of Lafarge.

In terms of section 29(2) of the Competition Act, 2002, the commission formed a prima facie opinion that the combination is likely to have an appreciable adverse effect on competition and accordingly, it had directed Holcim and Lafarge to publish details of the combination for bringing the combination to the knowledge or information of the public and persons affected or likely to be affected by such combination.

CCI today launched a public scrutiny of the finer details of the deal that would create one of the world's largest cement makers.

This is the second public scrutiny of M&A deal by the CCI after Ranbaxy-Sun Pharma merger.

CCI has asked concerned parties to submit comments with respect to the Holcim-Lafarge deal within 15 days, along with supporting documents on how the merger can adversely impact the concerned person or entity. The regulator said it would not consider 'unsubstantiated objections' to the deal.

The merger deal between Holcim and Lafarge, both of which have wide market in India, was announced in April this year.

There have been concerns that the transaction could raise anti-competitive issues in the Indian market.

CCI chairman Ashok Chawla had indicated that the regulator would take more time before deciding on the transaction.

Swiss major Holcim has controlling stakes in India's two leading cement makers - ACC Ltd and Ambuja Cements, which have a combined annual production capacity of about 46 million tonnes.

French entity Lafarge has an annual capacity of around eight million tonnes.

While announcing the deal in April, it was said that after a strategic optimisation of the portfolio through a pro-active divestment process, in anticipation of regulatory requirements, LafargeHolcim would occupy complementary positions.

Holcim and Lafarge have submitted to the commission that the proposed transaction "would not lead to removal of a vigorous and effective competitor" as the most aggressive players in this business segment are localised players.