LafargeHolcim sells India unit

Geneva - LafargeHolcim agreed to sell an Indian building-materials business to Nirma for an enterprise value of about $1.4 billion as the world’s biggest cement company trims assets to help pay down debt.

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The unit operates three cement plants and two grinding stations with capacity to produce about 11 million metric tons per year, LafargeHolcim said in a statement on Monday. Nirma is a closely-held conglomerate founded by Karsanbhai Patel, with with more than $1.1 billion in sales in sectors spanning detergents, soda ash and packaging.

The transaction will take LafargeHolcim Chief Executive Officer Eric Olsen a step closer to a disposal target of 3.5 billion francs ($3.6 billion) by the end of this year. Amid disappointing results, Olsen’s been forced to defend the merger that brought together the world’s two largest cement companies last year. Steep price declines in India had been among the factors weighing on results, and the CEO has been pushing through a cost-cutting programme to defend margins there.

“With this deal, two thirds of the programme has been secured and the remainder of the programme is well on track,” Olsen said in the statement. “We are confident that we will meet our target by the end of this year.”

Shares of LafargeHolcim have fallen about 16 percent so far this year, giving the group a market value of 25 billion francs. LafargeHolcim had signalled in May that it was “well advanced” with this year’s divestment programme and that more will follow in 2017.

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