Leading cement maker UltraTech Cement has received a notice from the fair trade regulator CCI over its proposed acquisition of the South-based India Cements Ltd.
UltraTech Cement, in a regulatory filing, said it has received notice from the Competition Commission of India (CCI), and the Aditya Birla group flagship firm is confident in the merits of its case.
“The Company has received a communication from the Competition Commission of India under Section 29 (1) of the Competition Act, 2002, regarding the proposed acquisition of The India Cements Ltd. The Company will be responding to the same,” said UltraTech.
The southern market for grey cement, where India Cements primarily operates, is highly competitive and fragmented, with the presence of over 35 grey cement manufacturers.
“We are confident of the merits of our case,” the Aditya Birla Group firm said.
Under the CCI Act, where the fair trade regulator is of the opinion that a combination is “likely to cause, or has caused an appreciable adverse effect on competition within the relevant market in India”, it shall issue a notice to show cause to the parties to combination calling upon them to respond within 15 days.
After the receipt of the response of the parties to the combination, CCI may also call for a report from its probe unit — Director General of Investigations.
Earlier in July this year, UltraTech Cement had announced the acquisition of a 32.72 per cent stake in India Cements from promoters and their associates in a Rs 3,954 deal in a move to expand its footprint in the highly competitive and fast-growing southern cement market, particularly Tamil Nadu.
Besides, it had also announced a Rs 3,142.35 crore open offer to acquire 26 per cent share of ICL from its shareholders.
UltraTech leads the Indian cement market with a consolidated capacity of 156.66 million tonnes per annum (MTPA) of grey cement.
It is followed by billionaire Gautam Adani-led Adani Group, which is rapidly pacing up its capacity through acquisitions and capacity expansions.
Adani Cement recently announced to acquisition of CK Birla group firm Orient Cement, through which it will achieve a capacity of 100 MT (million tones) per annum by the end of FY25 and a gain of 2 per cent in the overall market share in the country.
Both the cement makers are rapidly scaling up their capacity. Adani Group aspires to have 140 MTPA capacity by FY28, while UltraTech expects to have 200 MTPA by FY27.
