The Competition Commission of India (CCI) has initiated scrutiny into UltraTech Cement’s proposed acquisition of Chennai-based India Cements, raising concerns over potential adverse impacts on market competition. UltraTech, the largest cement producer in India, received the notice on December 5 under Section 29(1) of the Competition Act, which signals the possibility of a deeper investigation.
UltraTech Cement had first acquired a 23% “non-controlling financial stake” in India Cements in June 2024. This was followed by an additional 32.72% stake purchase from the promoters and associates in July. The company has also announced an open offer for another 26% stake, aiming for a majority holding in the Chennai-based firm. In its official statement, UltraTech expressed confidence in its case, highlighting the highly competitive and fragmented nature of the southern grey cement market, which includes over 35 manufacturers. “The Southern Market for grey cement is highly competitive, and we are confident of addressing any concerns raised by the CCI,” the company said.
India Cements, in a parallel filing, stated that it is in the process of responding to the CCI notice. The company echoed UltraTech’s stance, asserting that the cement market’s competitiveness would address any regulatory concerns. Under the Competition Act, UltraTech now has 30 days to submit its response to the CCI. Experts indicate that the company may propose remedial measures to address potential anti-competitive risks. However, if the commission remains unsatisfied, it could proceed to a more detailed Phase 2 investigation. A lawyer familiar with CCI processes remarked, “If the responses are convincing and potential remedies offered, the CCI may approve the deal. Otherwise, a more detailed probe is likely.”
Southern India accounts for nearly one-third of the country’s cement production. UltraTech’s acquisition of India Cements is part of a broader strategy to strengthen its footprint in the region. Earlier this year, UltraTech acquired Kesoram Industries’ cement division, which has a production capacity of 10.75 million tonnes across Karnataka, Telangana, and Maharashtra. That deal was approved by the CCI in March 2024. With Adani Cement also expanding aggressively in southern India, the market dynamics are witnessing intense competition among key players. UltraTech’s acquisition of India Cements could reshape the competitive landscape in the southern cement market. While the company defends its move as essential for market growth and efficiency, the CCI’s concerns underscore the critical need to balance consolidation with fair competition.
