CCI Notifies UltraTech Cement of its Proposed Acquisition of India Cements

On December 6, UltraTech Cement said that it has received notice regarding the proposed acquisition of India Cements from the Competition Commission of India.

In a stock exchange statement, the Aditya Birla Group company stated, "Unitech has received a communication from the Competition Commission of India (CCI) under Section 29 (1) of the Competition Act, 2002 regarding the proposed acquisition of The India Cements Limited (ICEM)."

The notification is an appeal for the parties to provide justification for why the combination should not be investigated. Within 15 days, the parties have to reply to the notice.

UltraTech stated that it is certain of the strength of its argument. "The Southern Market for grey cement, where ICEM primarily operates, is highly competitive and fragmented with the presence of over 35 grey cement manufacturers," the business stated.

"Given the highly fragmented nature of the southern region, we believe business combinations will not have any adverse effect on competition," stated Mangesh Bhadang, Research Analyst at Centrum Broking Ltd. Business combinations in other, less fragmented regions have already been approved by CCI. This development, in our opinion, is detrimental to the industry's overall consolidation. For now, we are awaiting additional information regarding this instance.

On July 28, UltraTech declared that it would pay Rs 3,954 crore to the promoters and their partners for a 32.72% share in India Cements. Prior to this, UltraTech had paid almost Rs 1,900 crore for two block agreements to acquire a non-controlling share of about 23% in ICL.