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Displaying items by tag: Acquisition
Europe: The European Commission (EC) has cleared the acquisition of Italcementi by HeidelbergCement under the condition that HeidelbergCement sell Italcementi's entire business in Belgium. The EC expressed concern that the merged companies would have owned more than 50% of the market share in the country.
The EC accepted that the two companies’ businesses were largely complimentary in Europe. HeidelbergCement is active in Northern, Western and Central Europe whereas Italcementi focuses on Southern Europe, operating cement facilities in Italy, France, Spain and Greece. Italcementi is also active in Belgium and Bulgaria. However, it noted that the companies’ Ordinary Portland Cement activities overlapped substantially in in Belgium and to a lesser extent in Southern Italy. It also pointed out that there are cross-border overlaps between their grey cement activities in Germany and France and in Bulgaria and Romania. The merging parties' activities in aggregates and ready-mix concrete mainly overlap in Belgium and Northern Spain whereas their white cement activities overlap primarily in Belgium, France and Austria.
HeidelbergCement has offered to sell Italcementi’s Belgian subsidiary Compagnie des Ciments Belges (CCB). The divestment includes: all of Italcementi's cement, ready-mix and aggregates assets in Belgium; Italcementi's stake in an existing limestone joint venture with LafargeHolcim; a portion of HeidelbergCement's limestone quarry in Antoing provided in exchange for a portion of Italcementi's Barry quarry, which will be retained by HeidelbergCement.
“We are very pleased with the positive decision of the European Commission,” says Bernd Scheifele, chairman of the managing board of HeidelbergCement. “This decision is an important milestone on our way to the full acquisition of Italcementi.” HeidelbergCement. Is still awaiting the decision of the US regulator the Federal Trade Commission for approval in that territory.
Lafarge Africa approves acquisition of UNICEM
16 May 2016Nigeria: The board of directors of Lafarge Africa has approved the acquisition of an additional 50% equity interest in the Untied Cement Company of Nigeria (UNICEM). The purchase was handled on the same terms of its initial acquisition of 35%. Following the acquisition Lafarge Africa will own an indirect interest of 100% in UNICEM.
The 50% share is currently held by Egyptian Cement Holdings, a company jointly owned by LafargeHolcim and Lafarge Africa. LafargeHolcim owns Egyptian Cement Holdings via Holcibel. Lafarge Africa is buying its latest purchase of shares from Holcibel.
CNBM cancels acquisition of Shanshui Cement
11 May 2016China: CNBM has cancelled its acquisition of Shanshui Cement due to changes in the board composition, disputes regarding the control of Shandong Shanshui Cement Group, the financial difficulties of Shanshui Cement and the prolonged suspension of trading of the shares in Shanshui Cement. It added that the final issue ‘significantly and adversely’ affected the liquidity of the company and impaired attempts to determine the current market price of shares in Shanshui Cement. Shanshui Cement has faced financial troubles since a shareholder battle for control of the company took place in late 2015.
South Korea: Baring Private Equity Asia and Glenwood Private Equity have completed their acquisition of Lafarge Halla Cement from LafargeHolcim. The company will be rebranded as Halla Cement.
“The Baring Asia team impressed us with its knowledge and experience within the cement industry, and we have confidence in their ability to support our growth in the future. The industry in Korea is seeing a period of strong demand and we expect that to continue in the medium- to long-term, so we are looking forward to capitalising on this as an independent company,” said Jong Goo Moon, CEO of Halla Cement.
Halla Cement operates one 7.6Mt/yr integrated cement plant with four kilns. It runs two slag grinding plants located in Gwangyang, Jeonnam and Pohang, KyongSang with a capacity of 0.8Mt/yr and 1.5Mt/yr respectively. It also operates 10 distribution centres in the country. The company employs around 500 workers.
Ireland: Even as it adjusts to its mammoth Euro6.5bn 2015 acquisition of LafargeHolcim’s divestments, Irish group CRH is reported to be mulling the purchase of US and Belgian cement assets, which HeidelbergCement may have to sell as a consequence of its acquisition of Italcementi. In Belgium HeidelbergCement and Italcementi have 4.5Mt/yr out of a total of 6.2Mt/yr of integrated cement capacity. In the US they share around 16.4Mt/yr out of 115Mt/yr.
Chief executive Albert Manifold told analysts that the group is focused on cutting back on its debt levels and is likely to look at assets should HeidelbergCement be forced to sell. "US cement is of interest to us and we're fully aware of the asset that may spin out of the potential acquisition," he said. "With regards to Belgium, it's a prime asset and certainly it would make a good fit with our businesses, providing the value is right."
CRH is also currently linked with a possible US$1.5bn acquisition of LafargeHolcim’s Indian cement businesses. The apparent enthusiasm CRH has with respect to expand is at odds with the majority of major players in the cement sector, many of which are going through periods of transition or are struggling with debt. "I'm always interested to open the paper and see what businesses we're bidding on,” added Manifold. “People are trying to talk up competition on deals. We're probably in 10% of the stuff we're associated with."
CRH’s earnings before interest, tax, depreciation and amortisation (EBITDA) grew to almost Euro1bn following a ‘positive trading backdrop’ in its main markets in the first three months of the 2016.
Competition and Markets Authority refers Breedon Aggregates purchase of Hope Construction Materials for further investigation
12 April 2016UK: The Competition and Markets Authority (CMA) has referred the proposed acquisition of Hope Construction Materials by Breedon Aggregates for further investigation unless Breedon can take action to address competition concerns. An initial study by the CMA found that competition issues might arise in 27 ready-mixed concrete sites, causing potential price rises for end consumers. The study ruled out any competition issues with regards to the companies’ aggregates and cement markets.
“The vast majority of the merger raises no concerns but there are a number of areas where the companies compete strongly with each other for customers and the concern is that the loss of such rivalry could lead to price rises for customers. The businesses may now resolve these concerns or face a detailed investigation,” said Sheldon Mills, CMA Senior Director of Mergers. Unless Breedon takes action an in-depth phase two investigation will be conducted by the CMA.
Breedon responded that the CMA’s response was expected. Subject to agreement with the CMA on appropriate remedies, Breedon expects to complete the acquisition later in 2016. Breedon announced in November 2015 that is was planning to buy Hope Construction Materials for Euro480m.
Germany/Italy: HeidelbergCement has released details on how it will integrate Italcementi into its business. Key details of the plan include the sale of Italcementi’s Belgium operations, the retention of the Italcementi brand and headquarters and the Italian cement producer’s i.Lab centre will assume research and development responsibilities for the entire group. However the acquisition is expected to result in up to 260 job losses at Italcementi’s base in Bergamo. The full integration plan is expected to be complete by 2020.
“Following our motto ‘all business is local’, it is important for us to preserve Italcementi's strengths and professional expertise, which have ensured its success in Italy and abroad. I am convinced that we will be able to achieve the planned Euro400m in synergies and bring Italcementi back to profits by operational improvements, streamlining the administration and leveraging the increased size of our combined business,” said Bernd Scheifele, chairman of the managing board of HeidelbergCement.
The acquisition still depends on approval from the European Commission and the Federal Trade Commission. On 1 April 2016, HeidelbergCement formally submitted the merger plan to the European Commission.
To this end, HeidelbergCement has decided to sell Italcementi’s entire Belgian operations, primarily consisting of Italcementi’s Belgian subsidiary Compagnie des Ciments Belges. The proposed divestment would remove all overlaps between the activities of HeidelbergCement and Italcementi in Belgium and the Netherlands. Preparations forthe divestment have already started and ‘significant’ interest has been noted. BNP Paribas will support the process.
The plan presented in Bergamo by Scheifele says it intends to keep the industrial network and plants in Italy as well as the Italcementi brand. In addition, HeidelbergCement builds on Italian management heading the Group's operations in Italy. i.Lab, based in Bergamo, where Italcementi will keep the headquarter of Italian country organisation, will become the home of the product research and development division of the whole group.
In order to streamline the overall group organisation some staff and administrative functions will be centralised in Heidelberg. According to the integration plan around 170 people will receive relocation offers to other offices within the group. Any redundancies in Bergamo, which could potentially affect between 230 and 260 people, will be handled using Italy's temporary layoff scheme. In addition, severence packages will be negotiated with the unions. At the end of the transition period in 2020, about 210 to 250 professionals will remain in Bergamo.
HeidelbergCement expects the closing of the acquisition of the 45% stake to be finalised in early July 2016 depending on the decision of the cartel authorities in Europe and the USA. Implementation of the integration plan will start after the closing.
Indocement acquires marine transport firm for US$2.1m
05 April 2016Indonesia: Indocement Tunggal Prakarsa has purchased stakes in marine transport services firm Lintas Bahana Abadi through the company's subsidiaries, Bahana Indonor and Indomix Perkasa. The acquisition is expected to support Indocement's business activities, particularly in the marine transport segment, according to Indonesia Finance Daily.
“Bangun Sukses Niagatama Nusantara will divest its shares in Lintas Bahana Abadi to Bahana Indonor and Indomix Perkasa for US$2.1m. The acquisition is fully funded from the two subsidiaries' internal cash,” said Christian Kartawijaya, President Director of Indocement Tunggal Prakarsa. Lintas Bahana will become a subsidiary that is indirectly owned by Indocement.
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.