Lafarge in talks to sell stake in Indian unit for $300 million - sources

MUMBAI Thu Dec 20, 2012 12:58pm IST

Related Topics

Stocks

   

MUMBAI (Reuters) - French cement maker Lafarge SA(LAFP.PA) is in talks with private equity and financial firms to sell a 20-25 percent stake in its India unit for about $300 million, two sources with direct knowledge of the matter told Reuters.

The world's largest cement maker has contacted a slew of firms, including Kohlberg Kravis Roberts and Co (KKR.N) and Temasek Holdings Pvt Ltd, said the two sources, with a potential deal valuing Lafarge's Indian operations at around $1.2 billion.

Lafarge may also exit India entirely if it gets a strategic investor to buy its operations in the country, said the sources, who declined to be named as the negotiations were private.

Officials at KKR and Temasek declined to comment. Lafarge officials were not available for comment.

Lafarge is in a drive to shed non-core assets to cut its debt to below 10 billion euros from 12.2 billion euros after its purchase of Middle Eastern cement maker Orascom in 2007 led to the loss of its investment-grade credit rating last year.

Lafarge is looking to sell its South Korean unit and has mandated bankers, according to a local media report.

A stake sale in its Indian unit would come at a time when analysts expect demand for cement to start recovering, driven by a government push to expedite infrastructure projects, especially ahead of general elections due by 2014.

Cement sales growth has been slow this year in India as a result of sluggish homebuilding and construction in Asia's third-largest economy and margins of cement makers have been pressured due to an increase in the cost of fuel and transport.

Lafarge started its India operations after buying out Tata Steel's (TISC.NS) cement business in 1999 and has expanded by buying Indian engineering conglomerate Larsen and Toubro's (LART.NS) ready-mix concrete business in 2008.

The French firm currently has four cement plants in India, according to the company's website.

(Reporting by Indulal PM and Aditi Shah; Editing by Rafael Nam and Matt Driskill)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

India-WTO Standoff

India-WTO Standoff

India threatens to derail WTO deal, prompts angry U.S. rebuke  Full Article 

Economic Pulse

Economic Pulse

New govt promises low and stable tax regime for economic revival.  Full Article 

IPO Probe Ends

IPO Probe Ends

Facebook says SEC's IPO probe ends, extending WhatsApp closing date  Full Article 

World Stocks

World Stocks

Goldman Sachs downgrades stocks to neutral for short term  Full Article 

Disappointing Results

Disappointing Results

Amazon's far-reaching ambitions, lack of profits, unnerve investors  Full Article 

Global Growth

Global Growth

IMF cuts outlook, warns of stagnation risk in rich nations  Full Article 

Market Eye

Market Eye

Nifty retreats from record highs on profit taking.  Full Article 

Waning Enthusiasm

Waning Enthusiasm

Markets' post-election enthusiasm lost on consumers.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage