Adani Group’s Nuvoco buy-out may not pass CCI muster
Company News

Adani Group’s Nuvoco buy-out may not pass CCI muster

Adani Group may not be able to swing the buy-out of Nirma group’s Nuvoco if the Competition Commission of India (CCI) were to strictly go by the threshold for mergers and acquisitions (M&A) transactions clearing.

The latest report from Jefferies on consolidation in the cement sector in India said that Adani may find it challenging to obtain the CCI approval for the Nuvoco buys based on the metric used by the competitor watchdog to pass or disallow M&A transactions.

Adani Group may be looking for a new purchase after buying out Holcim’s stake in ACC and Ambuja Cement. The next target was supposed to be Nuvoco.

CCI considers the Herfindahl Hirschman Index (HHI) when clearing acquisitions. The index is a measurement of market concentration, and it is applied to witness the extent to which a merger and acquisition (M&A) will improve concentration and weaken competition.

According to Jefferies, any M&A resulting in HHI surpassing 2,000 may face hindrances from the CCI, and merging Ambuja-ACC with Nuvoco gets the index close to uncomfortable levels.

For FY23, HHI for the Eastern region would move to 1945 from 1498 if we merge Ambuja and ACC with Nuvoco. It is a close number to Holcim Lafarge combination estimation where CCI felt it would be appropriate for Lafarge to divest, said the report.

In 2014, when Holcim and Lafarge announced their global merger, the competition watchdog in India had asked the combine to divest some of the assets in the country. In 2016, CCI approved the divestment by LafargeHolcim (now Holcim Ltd) of its assets in Lafarge India.

Presently, the players in the Eastern region, in descending order of their market share, are Dalmia (18%), Nuvoco (17%) Ultratech (15%); ACC+Ambuja (15%); Shree Cement (12%); Star Cement (5%); JSW Cement (3%); JK Lakshmi (3%) and Ramco (3%). The rest of the players have a mixed 9%. If ACC+Ambuja merges with Nuvoco, the combined market share will be 42%.

According to Jeffries, any single player surpassing 44% or two players crossing 31% each or three players surpassing 26% each, and so on will result in HHI surpassing 2,000.

Image Source

Also read: Adani to raise Rs 12k cr debt from SBI for Ganga Expressway

Adani Group may not be able to swing the buy-out of Nirma group’s Nuvoco if the Competition Commission of India (CCI) were to strictly go by the threshold for mergers and acquisitions (M&A) transactions clearing. The latest report from Jefferies on consolidation in the cement sector in India said that Adani may find it challenging to obtain the CCI approval for the Nuvoco buys based on the metric used by the competitor watchdog to pass or disallow M&A transactions. Adani Group may be looking for a new purchase after buying out Holcim’s stake in ACC and Ambuja Cement. The next target was supposed to be Nuvoco. CCI considers the Herfindahl Hirschman Index (HHI) when clearing acquisitions. The index is a measurement of market concentration, and it is applied to witness the extent to which a merger and acquisition (M&A) will improve concentration and weaken competition. According to Jefferies, any M&A resulting in HHI surpassing 2,000 may face hindrances from the CCI, and merging Ambuja-ACC with Nuvoco gets the index close to uncomfortable levels. For FY23, HHI for the Eastern region would move to 1945 from 1498 if we merge Ambuja and ACC with Nuvoco. It is a close number to Holcim Lafarge combination estimation where CCI felt it would be appropriate for Lafarge to divest, said the report. In 2014, when Holcim and Lafarge announced their global merger, the competition watchdog in India had asked the combine to divest some of the assets in the country. In 2016, CCI approved the divestment by LafargeHolcim (now Holcim Ltd) of its assets in Lafarge India. Presently, the players in the Eastern region, in descending order of their market share, are Dalmia (18%), Nuvoco (17%) Ultratech (15%); ACC+Ambuja (15%); Shree Cement (12%); Star Cement (5%); JSW Cement (3%); JK Lakshmi (3%) and Ramco (3%). The rest of the players have a mixed 9%. If ACC+Ambuja merges with Nuvoco, the combined market share will be 42%. According to Jeffries, any single player surpassing 44% or two players crossing 31% each or three players surpassing 26% each, and so on will result in HHI surpassing 2,000. Image Source Also read: Adani to raise Rs 12k cr debt from SBI for Ganga Expressway

Next Story
Resources

Madhya Pradesh Champions Inclusive Tourism at Heritage Sites

On the occasion of World Heritage Day, Madhya Pradesh is taking a significant step toward inclusive tourism by making its historical sites accessible to all — especially persons with disabilities. The state is rolling out its ‘Accessibility Infrastructure and Development’ project at Maheshwar, Mandu, Dhar, and Orchha, aiming to create a more welcoming experience at these iconic cultural destinations.The initiative, under the leadership of Chief Minister Dr Mohan Yadav and Tourism Minister Shri Dharmendra Bhav Singh Lodhi, includes infrastructure upgrades such as ramps, Braille signage, w..

Next Story
Resources

Runwal Realty Onboards Sonam Kapoor as Brand Ambassador

Real estate major Runwal has unveiled a refreshed identity as Runwal Realty, signalling a renewed commitment to crafting spaces that stand the test of time. With this refresh, the brand unveils its new philosophy: “Building for Generations to Come” and welcomes Bollywood star and global fashion icon Sonam Kapoor as its brand ambassador. This evolved identity reflects Runwal Realty’s commitment to creating not just homes, but heirlooms—crafted through visionary design, meticulous planning, global design expertise and an unwavering focus on quality. With the customer at its core, each de..

Next Story
Infrastructure Urban

Emerging Trends in Infrastructure and Transport 2025: KPMG

KPMG’s latest report, The Great Reset: Emerging Trends in Infrastructure and Transport 2025 edition, sheds light on the profound changes transforming the global infrastructure landscape. As industries adapt to the challenges posed by climate change, economic pressures, and technological advancements, the report identifies key trends and provides actionable insights for leaders in infrastructure and transport sectors. “In today’s interconnected world, the lack of standardized supply chain practices is not just an operational challenge—it’s an environmental and economic one. We’..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?