Birla eyes global assets of Holcim-Lafarge

Aditya Birla group, controlled by Kumar Mangalam Birla, is planning to bid for the cement assets being sold by European giants Holcim and Lafarge after their merger in April this year.

Kumar Mangalam BirlaUltratech Cement, controlled by Aditya Birla Group, is planning to bid next week for the assets valued at around $6.3 - $8.8 billion (€5 - €7 billion), Bloomberg yesterday reported, citing unnamed people with knowledge of the matter.

A completed deal would be India's biggest overseas acquisition this year and the group's largest overseas deal.

Holcim and Lafarge had announced their proposed merger in April this year (See: Cement giants Holcim and Lafarge announce merger of equals and have to divest some assets in order to meet regulatory requirements of global anti-competition authorities.

The two are planning to sell assets in Austria, France, Germany, Hungary, Romania, Serbia, the UK, Canada, Mauritius, the Philippines and Brazil.

Apart from UltraTech Cement, which is reportedly interested in Holcim-Lafarge's assets in emerging countries, other cement giants like Ireland's CRH, Mexico's Cemex, Germany's HeidelbergCement, Brazil's Votorantim Cimentos SA are also planning to bid for all the assets.

Also in the race are private equity firms BC Partners, Advent, CVC, Blackstone, Cinven, Bain and Onex and sovereign wealth funds Abu Dhabi Investment Authority, Singapore's GIC and Temasek, and Canadian pension fund CPP.

Aditya Birla Group is the largest cement maker in India with a capacity of 62 mtpa, followed by Holcim and Lafarge, who have a combined capacity of 57.5 mtpa.

Analysts say that the Aditya Birla Group would stand little chance by just bidding for assets in emerging countries as Holcim and Lafarge would give preference to bidders who are interested in all the assets.

Mumbai-based Aditya Birla Group has operations in 33 countries and employs more than 136,000 people worldwide.

The group has interests in sectors such as viscose staple fibre, metals, cement, viscose filament yarn, branded apparel, carbon black, chemicals, fertilisers, insulators, financial services, telecom, BPO and IT services.

UltraTech Cement is among the world's top 10 cement companies and manufactures and markets ordinary Portland cement, Portland blast furnace slag cement and Portland Pozzalana cement. It also manufactures ready mix concrete.

The company, which has grown through acquisitions, has 11 integrated plants, one white cement plant, one clinkerisation plant in the UAE, 15 grinding units, 11 in India, 2 in the UAE, one in Bahrain and Bangladesh each, and five terminals, four in India and one in Sri Lanka.

Its last overseas acquisition was in April 2010 when it purchased Dubai-based ETA Star Cement Company for an enterprise value of around Rs1,700 crore.

Last year, it agreed to buy a 51-per cent stake in Jaypee Cement's 5 million tonne per annum Gujarat facility in deal worth around Rs4,000 crore.