Lloyds Metals and Energy Ltd (LMEL) has sought the approval of the Competition Commission of India (CCI) for a multi-step transaction aimed at strengthening its foothold in the mining and infrastructure sector.
The proposed deal involves the acquisition of a majority stake in Thriveni Earthmovers and Infra Pvt Ltd (TEIL) and the integration of the mining development and operations (MDO) business of Thriveni Earthmovers Pvt Ltd (TEMPL) into TEIL.
Transaction details
The proposed transaction, structured in three key steps, will see LMEL subscribe to a 79.82 per cent equity stake in TEIL, followed by the demerger of the MDO business of TEMPL into TEIL. As consideration for this demerger, TEIL will issue fully paid-up 9.5 per cent non-cumulative non-convertible redeemable preference shares to TEMPL shareholders. Subsequently, TEIL will acquire a majority stake in Lloyds Surya Pvt Ltd, making it a subsidiary.
This combination, which falls under Section 5(a)(i)(A) of the Competition Act, 2002, is being notified to CCI, following the execution of a Share Subscription Agreement inked on February 17, 2025, and a Demerger Scheme filed with the National Company Law Tribunal (NCLT), Chennai, on October 9, 2024.
Strategic Rationale
The transaction is expected to create significant growth opportunities by leveraging the capital strength of the Lloyds Group and the operational expertise of the Thriveni Group. The integration aims to enhance efficiency, optimise resource utilisation, and generate cost synergies, ultimately improving profitability for the involved entities.
Company Profiles
Lloyds Metals and Energy (LMEL) was established in 1977 and operates in iron ore mining, sponge iron production, captive power generation, and pellet trading. The company supplies iron ore fines and pellets across global markets.
Thriveni Earthmovers and Infra (TEIL) is a newly incorporated entity with no business operations at present.
Mining Development and Operations (MDO) Business of TEMPL specialises in mine development and operation, offering comprehensive services in iron ore, coal, baryte, and manganese extraction. It provides end-to-end mining services, including exploration, resource assessment, mining operations, beneficiation, and logistics.
Lloyds Surya Private Ltd is a wholly-owned subsidiary of LMEL based in Maharashtra, India. It recently commenced operations, but had no business activity during the financial year 2023-24.
Competition Outlook
The parties involved have asserted that there are no horizontal overlaps or vertical relationships between them, which could raise competition concerns. Furthermore, LMEL and TEMPL’s MDO business have an existing commercial arrangement under which TEMPL provides mining support services to LMEL’s iron ore mine in Surajgarh, Maharashtra, on an arm’s-length basis.
The CCI’s review of the proposed transaction will determine whether it raises any competition concerns in the Indian mining and infrastructure sector. If approved, the deal is expected to enhance operational capabilities and drive value creation for all stakeholders involved, economy watchers said.