Mexico City-based Elementia SA is in negotiations to buy out partner Lafarge SA in their joint venture, Bloomberg reported citing people with knowledge of the matter.

Elementia has the right to buy Lafarge’s 47 percent stake under an option described in the original terms of the partnership, noted the Bloomberg sources. Lafarge wants to avoid competing with itself in Mexico after agreeing in April to a $40 billion merger with Holcim Ltd., which already operates in the country. LafargeHolcim didn’t include the Mexican joint venture on a list of potential disinvestments released last month.

While the stake could be valued upwards to $500 million, Lafarge may be forced to offer it at a discount to convince the Mexican company to buy. Elementia, which is reportedly working with Citigroup Inc. for a potential initial public offering, may explore other options, stated the sources. It may opt to invest in its existing business or make a different acquisition as it already has majority and management control of the venture.

Elementia sells cement in Mexico under the brand Cementos Fortaleza.