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In what is being termed the largest private equity investment in the cement sector, Baring Private Equity Asia has picked up a 14 per cent minority stake in the India unit of cement major Lafarge for € 200 million (around Rs 1,427 crore).
The deal values the Indian arm at $1.86 billion.
The transaction through capital increase is subject to approval of the regulatory authorities.
It is set to accelerate Lafarge's growth plans in India in all its product lines such as cement, aggregates and concrete.
India is the second largest producer of cement after China.
Analysts tracking the company said this would also be the first time a multinational (French cement maker Lafarge SA) has divested a minority stake in its India operations to a private equity (PE) firm to fund growth.
The Lafarge deal tops the $175-million infusion in the unlisted cement business of Dalmia Cement by PE major KKR in 2010.
Lafarge entered the Indian market in 1999 through its cement business and now operates four cement plants, two in Chhattisgarh and grinding units in Jharkhand and West Bengal.
Growth story
In a statement, the company said the group would continue to grow in India and provide innovative products and solutions to accompany India's urbanisation needs, particularly in the housing and infrastructure sectors.
Incidentally, Lafarge has grown in the country following several acquisitions.
The company started its India operations after buying Tata Steel’s cement business in 1999, and later Raymond’s cement division in 2000.
It had also entered into a deal with Larsen and Toubro.
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