The Competition Commission of India (CCI) is looking at the proposed merger between Holcim and Lafarge, which it has stated ‘is likely to have an appreciable adverse effect on competition’. Holcim and Lafarge have been asked to publish details of the planned merger in four leading newspapers and on their websites to keep the public informed. This publication can be viewed here.
In this document, the companies put forward their argument as to why the merger would not negatively impact the Indian industry, including the following statement:
‘The Parties note that the Indian cement industry is characterized by a large number of players who compete vigorously indicating that the markets are highly competitive. Further, Parties note that low barriers to entry have led to the entry of large number of new players in recent years (for example, Reliance Cement, Wonder Cement, etc.), and expansion of capacities by existing players (for example UltraTech, Shree Cement, etc). Given the positive outlook for the cement demand in coming years, the Parties note that the cement industry is likely to witness significant capacity addition and expansion across various regions, making the markets more competitive and consequently having a downward impact on the Parties’ market shares.’
Today, India’s Economic Times is reporting that it is likely the CCI will require the companies to divest assets in order to get the merger through – a so-called ‘structural remedy’. Thus far the companies have not revealed any plans for divestments in India, where their combined market share is not so significant as in other markets where divestments are being made, for example in Europe.
Edited from various sources by Katherine Guenioui
Read the article online at: https://www.worldcement.com/asia-pacific-rim/03122014/india-competition-commission-evaluates-holcim-lafarge-merger-943/