Displaying items by tag: Acquisition
India: Jaiprakash Associates has revised a US$2.4bn deal to sell cement plants to and UltraTech Cement. The new deal excludes a 1.2Mt/yr cement plant in Karnataka. UltraTech will also spend US$71m to complete a cement grinding plant that is currently being built. UltraTech will now acquire Jaiprakash Associates cement plants in five states with total capacity of 21.2Mt/yr. Jaiprakash Associates will retain a cement capacity of 10.6Mt/yr.
A Memorandum of Understanding signed in February 2016 agreed the terms of the sale. However, currency fluctuations between the Indian Rupee and US Dollar have kept the US Dollar value of the revised deal at a similar amount despite a drop in the Indian Rupee amount. The sale is expected to take around 12 to 14 months to complete subject to statutory and regulatory approvals.
Italy: Italian economic development minister Federica Guidi is scheduled to meet with Bernd Scheifele, CEO of HeidelbergCement, to discuss its acquisition of Italcementi. The transaction has been closely followed by the minister since its announcement and Guidi had already met Scheifele in the early stages of the process, according to the Il Sole 24 Ore newspaper. HeidelbergCement had asked for more time to complete competition requirements at the European level before this latest meeting.
Bahrain: The Abu Dhabi Financial Group (ADFG) has signed a sale agreement with GFH Financial Group to buy a 10% stake in the Falcon Cement Company, according to Gulf News.
“With Falcon Cement’s strong market position and potential for future growth following the completion of a second production line later in 2016, the company represents an attractive investment opportunity for ADFG,” said Jassim Al Seddiqi, chief executive officer of ADFG.
Falcon Cement has a cement production capacity of 0.35Mt/yr. Production capacity is expected to increase to 0.85Mt/yr when the second production line launches at the end of 2016.
Germany: HeidelbergCement has issued a Eurobond with a value of Euro1bn and a maturity date of 30 March 2023. The international bond has a fixed coupon of 2.25%/yr.
The proceeds from the bond will be used to pre-fund the upcoming Italcementi acquisition and other general corporate purposes. Subsequently, the bridge financing for the takeover will be reduced from Euro2.7bn to Euro2bn. The bridge financing will be refinanced by free cash flow, the sale of production sites and the issuance of bonds.
South Korea: Eugene Group intends to increase its stake in Tongyang up to 25%. The South Korean conglomerate has expressed its interest in leading Tongyang, including its cement subsidiary, according to Maeil Business.
“Tongyang has tens of thousands of shareholders without a significant major shareholder after its workout program,” said Chung Jin-hak, head in charge of construction materials unit of Eugene Group. “As of late last year, among 34,000 shareholders, only four companies including Eugene Group and Pine Tree Investment and Management own more than 1% stake each.”
Tongyang’s largest shareholder Eugene Group holds a 10.01% stake in the company, followed by the 9.74% owned by Pine Tree Investment and Management. Eugene Group plans to buy shares through all possible measures such as purchasing shares directly from major shareholders, in a block trade or in the market. Eugene Group has highlighted potential synergies between its own concrete business and Tongyang.
Grupo Corripio buys Cementos Andino Dominicanos
21 March 2016Dominican Republic: Grupo Corripio has acquired the majority of the shares of Cementos Andino Dominicanos in Cabo Rojo, according to the country’s President Danilo Medina. The previous owners will retain a stake in the company.
All current employees will receive their wages in the first two weeks of April 2016. In addition, between 300 and 400 new jobs will be created. Dominican business José Luis Corripio Estrada and owner of Grupo Corripio added that it will increase the company’s cement production capacity and potentially increase the number of workers to 700.
India: Dalmia Bharat has received approval from the Competition Commission of India (CCI) to acquire a 15% stake in its subsidiary Dalmia Cement Bharat from private equity firm KKR for over US$181m in a cash and stock deal. After the purchase, Dalmia Cement Bharat will become a wholly-owned subsidiary of Dalmia Bharat.
Dalmia Bharat provides management services to the group companies belonging to the Dalmia Bharat group, owns intellectual property such as trade names for its group companies and holds shares in the group companies, either on its own or through its subsidiaries. Dalmia Cement Bharat produces cement and it also makes refractories.
Italy: Cementir Italia has had its Euro125m offer to purchase Sacci SpA approved by the Italian Antitrust Authority, the company has said in a statement. The competition body gave its approval to Cementir Italia’s owner, Cementir Holding.
Cementir Italia submitted its offer for the business in November 2015. The target assets comprise five cement production plants in central and northern Italy, three terminals, several ready-mixed concrete facilities, most of which in central Italy, a transport service and some equity interests in other companies.
Cementir Italia will pay part of the acquisition price upon closing of the transaction and the remainder within 24 months from completion, Cementir said in a previous statement. The first part of the payment is subject to adjustment, it added. Cementir plans to finance the acquisition with new and existing debt.
UltraTech to restructure Jaiprakash Associates deal if mining law amendment not approved
07 March 2016India: UltraTech will create a separate corporate structure for the cement assets of Jaiprakash Associates it has agreed to buy if a key mining law is not amended by June 2016. An amendment to the Mines & Minerals (Development & Regulation) (MMDR) Act in 2015 suggested that the transfer of mining rights could only be passed by auction, leading to delays in several mergers and acquisitions in the cement industry.
"We have considered both scenarios. If the amendment goes through, it is a clear asset purchase. If not, there are structures we have in mind, with which we will be able to do the deal," said Atul Daga, chief financial officer of UltraTech to the Hindustan Times. He added that the deal is not entirely linked to the mining amendment. "The agreement is for specific assets. It's more about how you structure it. I do not want to comment on the structure until the closure of the definitive agreement."
If the MMDR Act amendment is not approved, Jaiprakash Associates will need to create a separate entity out of the assets being sold to UltraTech, for the deal to proceed. However, it will refinance Jaiprakash's borrowings at lower rates if the MMRDA amendments get approved.
UltraTech announced in late February 2016 that it was purchasing the majority of Jaiprakash Associates’ 22.4Mt/yr cement portfolio instead for US$2.4bn.
India: Members of the Birla family have challenged the take-over of the Reliance Infrastructure in the Calcutta High Court claiming that it was done without the consent of the family or the court. The move follows a prolonged legal battle in 2004 between the Birla family members and chartered accountant R S Lodha. Lodha claimed that M P Birla's widow Priyamvada had bequeathed the assets of the estate to him. The matter is still being contested legally.
Representatives for Birla Corporation defended the purchase saying that the funds were not being taken from the estate and that it was being done through internal accrual and other sources. They added that the US$715m take-over would be a 'sweet deal' as the assets of the Reliance Infrastructure cement company were new. The deal was announced in early February 2016.