The Competition Commission of India (CCI) has initiated a review of UltraTech Cement’s proposed acquisition of India Cements. UltraTech Cement disclosed in an exchange filing that it has received a communication from the regulator under Section 29(1) of the Competition Act, 2002, regarding the acquisition.
“The company will be responding to the same. The southern market for grey cement, where India Cements operates, is highly competitive and fragmented with over 35 manufacturers. We are confident in the merits of our case,” UltraTech Cement stated. The specifics of the concerns raised by the CCI remain unclear.
UltraTech, India’s largest cement producer, announced in July its intention to acquire a 32.72 per cent stake in Chennai-based India Cements for INR39.54bn (US$466.78m). The acquisition involves buying 28.42 per cent from promoters Srinivasan N, Chitra Srinivasan, Rupa Gurunath, and S.K. Asokh Baalaje, along with a 4.3 per cent stake from Sri Saradha Logistics, at INR390 per share. The deal remains subject to regulatory approvals.
In its submission to the CCI, UltraTech clarified, “There exist some insignificant and minuscule vertical relationships between UltraTech and India Cements on a non-exclusive and arm’s length basis, in the ordinary course of business.”
The acquisition would strengthen UltraTech's market position in the highly competitive southern Indian cement market, where India Cements is a key player with a significant presence.
