The Competition Commission of India (
“Considering the facts on record and the details provided in the notice given under sub-section (2) of Section 6 of the Act and assessment of the proposed combination on the basis of factors stated in sub-section (4) of Section 20 of the Act, the Commission is of the opinion that the proposed combination is not likely to have an appreciable adverse effect on competition in India in any of the relevant market(s) and therefore, the Commission hereby approves the same under sub-section (1) of Section 31 of the Act,” stated the notice by CCI.
Under the agreement, JAL has proposed the sale of a cement grinding unit at Panipat in Haryana with a capacity of 1.5 million tonnes per annum to SCL on September 19, 2014.
“The Commission noted that in the relevant market comprising the states of Haryana and Rajasthan as discussed above, the market shares in terms of installed capacity is 23% of SCL and 3% for the cement grinding unit. Thus the post combination market share of the acquirer will increase to 26%. The market is moderately concentrated but the change in market concentration as indicated by incremental HHI would not be significant,” said the notice by CCI.
The companies have also informed CCI that the capacity utilization of the plant has been depreciating over the years and reached 42% in 2013-14, further declining to 19% in the first quarter of the current fiscal year.
“The parties have stated that this reduction in capacity utilization is due to higher cost of operating the plant vis-à-vis other plants of JAL and high logistics cost of transporting clinker from JAL’s Baga unit in Himachal Pradesh…SCL needs additional cement grinding capacity to fully utilize its available clinker production capacity,” noted the commission.