CCI Clears Dalmia Cement’s Takeover of Jaiprakash Associates via Insolvency Process

In what certainly is an important aspect of the cement industry, the Competition Commission of India (CCI) has finally approved the long-warm request for acquisition of 100 percent stake in the Jaiprakash Associates Ltd by Dalmia Cement (Bharat) under the corporate insolvency resolution process (CIRP) as prescribed by the Insolvency and Bankruptcy Code, 2016.

The acquisition of JAL is a very strategic move for the Dalmia Cement (Bharat) team as it targets establishing a footprint across parts of the country. This acquisition should further fortify Dalmia Bharat Group’s position in cement manufacturing while reaping benefits from JAL’s manufacturing capacity and regional market share.

JAL belongs to the diversified Jaiprakash Group that has an interest in cement, real estate, and hospitality, along with engineering, procurement, and construction (EPC) services. The company has had a prolonged presence in financial stress and is presently being subjected to insolvency proceedings. The acquisition will provide a resolution to the creditors while at the same time assisting Dalmia in accessing JAL’s assets and infrastructure.

Dalmia Bharat, already active in the Indian cement sector, views the transaction as a cog in its growth machinery. The company aims to enhance operations and expand its geographical reach by merging distressed assets. With this CCI approval, all but removing the final regulatory objection to be cleared, the acquisition is close to fully coming into being.

Beyond this acquisition, the trend of consolidation in India’s cement industry may witness bigger players on the insolvency path to acquire sick assets to increase their market share.

Dalmia Cement’s production capacity and competitive position in key markets are expected to be boosted proportionately upon successful completion of the transaction.

The deal offers insight into the rising application of the IBC program, as an efficient mechanism for industrial restructuring and consolidation by sector, especially in core infrastructure industries, e.g., cement.