On May 5, 2020, CCI approved an acquisition of 100% shareholding in Emami Cement Limited (‘ECL’) by Nuvoco Vistas Corporation Limited (‘NVCL’).^[1]  The parties are involved in the manufacture and sale of cement (specifically, grey cement) in India. ECL was also engaged in the sale of clinkers to other cement manufacturers. NVCL manufactured clinkers for captive consumption only. CCI delineated the relevant market as the market for manufacture and sale of grey cement (through trade and non-trade mode) in Chhattisgarh and West Bengal (‘Relevant Market’).^[2]

CCI found the combined market shares of the parties to be around 15-20% in terms of installed capacity and sales volume in the Relevant Market. The Relevant Market also had significant competitors such as Shree Cement, Holcim, Ultratech, and Dalmia and the Herfindahl Hirschman Index (‘HHI’)^[3] and Delta-HHI values assessed by CCI in terms of the considered metrics were less than 2000 and 250. On this basis, CCI found that this overlap was not likely to cause an AAEC. It also did not find any competition concern in its analysis of the vertical overlaps between the parties. This is because the sale of grey cement and clinkers to third parties by ECL constituted an insignificant portion of its revenue to cause any foreclosure concerns.

[1] Combination Registration No. C-2020/03/734.

[2] This area comprises the states of Chhatisgarh, West Bengal, Bihar, Jharkhand, and Odisha as per CCI’s decision in Combination Registration No. C-2014/07/190 – Lafarge/Holcim.

[3] HHI is one of the indices used to assess the level of market concentration and the changes in the concentration due to a combination.