As per the deal, Ultratech, a leading manufacturer of cement in India, will acquire Jaypee’s cement unit in Gujarat comprising an integrated cement plant at Sewagram, limestone reserves, captive power plant and mining leases, among others. In an order released on Monday CCI said ‘it is of the opinion that the proposed combination is not likely to have an appreciable adverse effect on competition in India’.
The commission in its order has observed that ABG Cement and Lafarge India were likely to set up cement plants in the state of Gujarat and Rajasthan respectively.
According to CCI, ‘entry of new firms is generally considered to counter-balance any attempt by the merging parties or their competitors to profit from the potential reduction in competition brought about by the merger’.
‘The new entrant, if of sufficient size, effectively disciplines the existing market participants, as size of the new entrant does matter in the markets characterised by few players,’ the regulator said.
Among others, CCI also observed from Ultratech’s submissions that it intends to introduce and ‘utilise its processes and core competence to increase the capacity utilisation of Jaypee’s assets, thereby increasing overall economic efficiency in production and increase the overall quantity of cement in the market for grey cement’.
The commission in its order has observed that ABG Cement and Lafarge India were likely to set up cement plants in the state of Gujarat and Rajasthan respectively.
According to CCI, ‘entry of new firms is generally considered to counter-balance any attempt by the merging parties or their competitors to profit from the potential reduction in competition brought about by the merger’.
‘The new entrant, if of sufficient size, effectively disciplines the existing market participants, as size of the new entrant does matter in the markets characterised by few players,’ the regulator said.
Among others, CCI also observed from Ultratech’s submissions that it intends to introduce and ‘utilise its processes and core competence to increase the capacity utilisation of Jaypee’s assets, thereby increasing overall economic efficiency in production and increase the overall quantity of cement in the market for grey cement’.