LafargeHolchimReuters file

LafargeHolcim announced on Thursday that it was planning to sell Lafarge India's entire cement capacity of 11 million tonnes per annum (mtpa). The company also confirmed that it was no longer in talks with Birla Corporation Ltd (BCL) to sell its two cement units in eastern India with 5.1 mtpa capacity.

"The divestment would require the approval of the Competition Commission of India (CCI) as an alternate remedy for the merger of the Group's legacy companies," LafargeHolcim said in a statement.

"The Group is no longer in discussion with Birla Corporation Limited (BCL) for the sale of the Jojobera and Sonadih cement plants in Eastern India that was announced earlier. The BCL proposal involved the divestment of 5.1 million tons capacity by Lafarge India," the statement added.

The proposal to sell its entire cement business in India is "now under consideration by the CCI", LafargeHolchim said.

In August 2015, BCL entered into an agreement with Lafarge India to buy the Jojobera and Sonadih cement businesses from Lafarge India for Rs 5,000 crore, subject to regulatory approvals. 

However, on 2 February, BCL said that Lafarge India had expressed its inability to go ahead with the agreement and said that it was planning to take legal action against Lafarge India.

On its part, LafargeHolcim, in its 4 February statement, cited regulatory hurdles for not being able to go ahead with the August 2015 agreement. 

"Due to the current regulatory issues relating to the transfer of mining rights captive and critical to the two plants, LafargeHolcim was obliged to submit an alternate remedy to the CCI to ensure compliance with the order."

In a related development, Sajjan Jindal, CMD of JSW Cement, had earlier said that his company is in talks with Lafarge India to buy its cement business.

Lafarge India's total cement production capacity is currently around 11 mtpa.