Lafarge buys Larsen & Toubro's concrete business for 226 million
The acquisition will help Lafarge become the leader in the Indian ready-mix concrete market
French cement producer Lafarge SA announced, Wednesday, that it has acquired India's engineering and construction major Larsen & Toubro's (L&T) concrete unit for 226 million ($349.5 million).
The acquisition, which allows Lafarge to gain access to 66 concrete plants across India with an estimated volume of 4.1 million cubic meters, not only gives it a pan India presence but also makes it India's largest readymix-concrete (RMC) maker.
L&T, which has 25 percent market share in the RMC business, earns $250 million annually from it. In 2001, L&T sold off its cement unit to the Birlas and last December, it hived off its RMC business into a separate unit called L&T Concrete, to focus solely on the engineering and construction business. Among the other non-core businesses that L&T has sold are its bottle plant in Nasik and dairy equipment business.
Besides Lafarge, others in the fray to buy L&T Concrete were UK private equity firm 3i Group, German cement company Heidelberg, Swiss cement maker Holcim and Indian conglomerate AV Birla Group.
While AV Birla Group is competing in the RMC business under the names Grasim and UltraTech, Holcim is carrying out its business operations through ACC and Ambuja Cements.
In a statement, Bruno Lafont, chairman and CEO, Lafarge, said the acquisition would allow them to take a "pioneering step in the emerging Indian market."
"Lafarge was the first in its industry to move into aggregates and concrete in a significant way, over 10 years ago, and to develop a unique expertise in creating value in the concrete business," Lafont added.
Lafarge entered the Indian market in 1999 by acquiring Tata Steel's cement business. In 2001, it purchased Raymond's cement unit. At present, the French cement major has three cement plants in India, including two units in Chhattisgarh and a grinding plant in Jharkhand.
About Lafarge
Lafarge is the world leader in building materials, with top-ranking positions in all of its businesses: Cement, Aggregates & Concrete and Gypsum. With 90,000 employees in 76 countries, Lafarge posted sales of 17.6 billion and net income of 1.9 billion in 2007.
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