Lafarge, the world's second biggest cement maker after Holcim, said it agreed to buy Larsen & Toubro's (L&T's) ready-mix concrete (RMC) business for an enterprise value of Rs 1,480 crore ($349 million) as part of its plan to expand into emerging markets and establish its leadership in India.
Lafarge will buy 66 concrete plants of L&T located in key markets, including Delhi, Kolkata, Mumbai and Bangalore, with a total estimated volume of 4.1 million metric cubic capacity in 2008.
With this acquisition, Lafarge's third in the country, the French firm will lead the Indian RMC market and capture a market share of 25 per cent in India.
Bruno Lafont, chairman and CEO of Lafarge, said, "With this acquisition, we are taking a pioneering step in the emerging Indian market."
Lafarge beat Holcim in the race to buy L&T Concrete. The Switzerland-based Holcim has its operations in the country through ACC and Ambuja Cements.
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ACC has a separate subsidiary to look after the RMC business under the name ACC Concrete.
This acquisition comes soon after Lafarge started its first ready-mix concrete operations in Raipur, Chhattisgarh.
One of Lafarge's key strategic focuses today is innovation in concrete, which translates into an accelerated roll-out of value-added concrete products in both developed and emerging markets.
Lafarge will be aiming to offer the Indian market its advanced and value-creative solutions for construction, the company said in a statement issued late in the evening.
In the cement business, Lafarge has emerged as a major player in eastern India, with a production capacity of 5.5 million tonnes and a strategic plan to more than double its presence in the next five years through greenfield projects.
Lafarge entered the Indian market in 1999 with the acquisition of Tata Steel's cement division, which was followed by the purchase of the Raymond Cement facility in 2001.
At present, Lafarge has three cement plants in India