NEW DELHI: The country's fair trade regulator Competition Commission of India (CCI) has appointed French audit firm Mazars to monitor the divestment of French cement giant Lafarge's entire India operations.
Mazars will ensure that the proposed asset sale of Lafarge India — for overcoming regulatory hurdles over its multi-billiondollar merger with Swiss rival Holcim last year — does not have any adverse effect on competition in Indian cement market, a senior government official said.
"This agency will review the potential buyers and review the progress of the divestiture process. The agency would supervise a swift completion of divestment process and will also see that all combination law ..
Competition Appellate Tribunal (Compat), which hears cases against CCI, early this month had put Lafarge's divestment on hold till May 9 after Dalmia Cement approached it.
The cement maker argued that CCI could not approve stake sale until the acquirer was known as it could raise competition concerns. The regulator will now tell Compat that a third party audit firm will supervise the divestment to ensure transparency, the official said.
"We don't want global plans of any company get stuck due to Indian regulators unnecessarily. We had allowed Lafarge to go ahead with 100% stake sale after they couldn't merge with Holcim, because we have to keep in mind the ease of doing business as well," a senior CCI official told ET.
"We are ensuring that there are enough safeguards so that there's no situation of a couple of players dominating the Indian cement market," the official said. Dalmia's legal counsel had argued before Compat that CCI can ratify the new deal only after a fresh notice is filed by Lafarge including the details of proposed buyer.
In case of Sun-Ranbaxy merger last year CCI had appointed Price Waterhouse & Co as a monitoring agency for the divestment process.
CCI had earlier barred any player with over 5% of the total installed cement capacity in the relevant geographic market to bid for Lafarge's units.
The plan to sell all of Lafarge India's assets kicked off last month. It came after an earlier deal to sell two cement units to Birla Corp in a .`5,000-crore deal fell through because of restrictions related to the transfer of mines. Lafarge India has 11 million tonnes per annum cement capacity.
Earlier this March, an amendment to the Mines and Minerals Development Act was passed by the Lok Sabha, making it possible for companies to transfer a mine asset linked to a cement unit at the time of a sale.While the amendment has been in discussion for the last few months, LafargeHolcim decided to divest its interest in Lafarge India to hasten the closure of its global merger in India.
CCI on February 2 approved the revised plans through a supplementary order while the original directive came almost a year back, on March 30, 2015.
The original CCI order allowed the merger of Holcim and Lafarge on condition that they would divest their plants in East India as merger raised competition concerns.
This article was published in the Economic Times on Saturday, 30 April 2016, the article can be found here .