The Competition Commission of India (CCI), on Thursday, said it has approved the acquisition of Emami Cement Ltd by Nuvoco Vistas Corp Ltd (part of the Nirma group).
“CCI India approves acquisition of 100% of the total issued and paid up share capital of Emami Cement Limited, on a fully diluted basis, by Nuvoco Vistas Corporation Limited," the regulatory body said in a tweet.
The development comes after Emami received queries on whether the deal was not progressing further in the wake of covid-19 pandemic. However, on 14 May, both companies clarified in a joint statement that “the proposed transaction is very much on, subject to the receipt of approval of CCI and other third parties."
Emami had entered into a binding agreement on 6 February with Nuvoco Vistas for the divestment of its 100% equity stake in Emami Cement Ltd for an enterprise value of ₹5,500 crore. At the time of announcing the sale of the cement business, Emami had mentioned that the transaction was expected to be completed in three-four months.
The sale of the cement business is part of Emami group’s plan to become debt-free. Last year, the group’s founders sold 20% in their flagship household goods company, Emami Ltd, for ₹2,830 crore as part of the plan.
Emami Cement Ltd operates an integrated cement plant in Risdah, Chhattisgarh, and grinding units in Bihar, West Bengal and Odisha, with a total installed capacity of 8.3 million tonnes per annum. It has mining leases in Chhattisgarh, Rajasthan and Andhra Pradesh.
This is Nirma’s second cement acquisition in east India. In 2016, Nirma acquired Lafarge India’s cement assets at an enterprise value of $1.4 billion. Lafarge India operated three cement plants and two grinding stations with a total capacity of around 11mtpa.
The Emami cement acquisition will bring Nuvoco’s total cement capacity in eastern, northern and western India to 23.5mtpa, including an ongoing capacity expansion project at its Jojobera plant and over 60 ready-mix plants. The combined operations will span three facilities in Chhattisgarh, two each in Rajasthan and West Bengal and one each in Bihar, Jharkhand, Odisha and Haryana.