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India – CCI Approves Acquisition Of Assets Of Jaypee Cement By Ultratech.

7 February, 2014

 

 

On December 20, 2013, CCI approved the proposed acquisition of a cement unit and a grinding unit (‘Target Assets’) by Ultratech Cement Limited (‘Ultratech’) from Jaypee Cement Corporation Limited (‘Jaypee’).


CCI considered that the relevant product market for the proposed acquisition may be limited to only the market for grey cement, since this is the only market in which both Ultratech and Jaypee overlap. CCI also observed that both the cement plants to be acquired by Ultratech are located in Gujarat, which is also their main area of supply. CCI deemed it appropriate to leave the exact delineation of geographic market open because under any alternative and “reasonable” market definition, the proposed acquisition is not likely to raise any appreciable adverse effect on competition (‘Adverse Effect’). Yet, for the purposes of assessment, CCI considered the cement plants located in Gujarat and the adjoining states which cater to a significant proportion of the total cement consumption in Gujarat.


While reviewing whether the proposed acquisition causes or has the potential to cause an Adverse Effect in the relevant market, CCI noted that pursuant to the combination, the combined market share of Ultratech may go up to 31% (in terms of volume of production) and 36% (in terms of installed capacity). The market, however, will continue to be competitive as there are a number of other players, like ABG Cement and Lafarge India Private Limited, which are either entering the market or expanding their capacities. CCI also considered the efficiencies arising out of the proposed acquisition.


Based on this, CCI concluded that the proposed transaction is not likely to cause an Adverse Effect and hence approved the proposed transaction.

 

AZB

 

For further information, please contact:

 

Zia Mody, AZB & Partners
zia.mody@azbpartners.com

 

Abhijit Joshi, AZB & Partners 
abhijit.joshi@azbpartners.com


Shuva Mandal, AZB & Partners 
shuva.mandal@azbpartners.com

 

Samir Gandhi, AZB & Partners
samir.gandhi@azbpartners.com


Percy Billimoria, AZB & Partners 
percy.billimoria@azbpartners.com

 

Aditya Bhat, AZB & Partners 
aditya.bhat@azbpartners.com

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