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Displaying items by tag: Acquisition
Seruji buys 60% stake in Savannah Cement
31 March 2015Kenya: Mauritian company Seruji has acquired a 60% stake in Athi River-based Savannah Cement following approval from the Competition Authority of Kenya (CA).
Seruji completed the buyout from China's Wan Ho International, which held 40% and Acme Wanji, which owned 20%. Savannah Heights has retained a minority stake in Savannah Cement. The shareholding shake-up makes Savannah Cement Kenya's first fully-owned cement producer, as both Seruji and Savannah are owned by Savannah Cement founder Benson Ndeta.
The buyout comes ahead of a planned US$250m clinker plant project in Athi River by Savannah Cement, which aims to reduce its operating costs by eliminating clinker imports. Cement demand has risen steeply over the past two years in tandem with a host of several large projects in both the public and private sectors. The US$1.88bn Lamu coal power plant and the US$3.23bn standard gauge railway are among the projects that have increased domestic cement demand.
Domestic cement consumption grew by nearly 20% to hit a record 5Mt in 2014, driven mainly by robust growth in property development. However, Kenya's cement producers have been producing more cement than the market can absorb. In 2014 production hit 5.7Mt, up from 5.05Mt in 2013. The Standard Investment Bank has forecast that production will rise to 6.3Mt in 2015 and 6.7Mt in 2016.
Holcim sells Siam City Cement stake for US$681m
30 March 2015Thailand: Holcim has sold its stake in Siam City Cement (SCC) for US$681m. The sale of its 27.5% stake in the Thai company will result in a pre-tax gain of roughly US$378m. The sum was booked in the first quarter. Jardine Matheson Group, a Hong Kong conglomerate, bought 24.9% of SCC from Holcim, while institutional investors purchased 2.6%. Holcim had held a stake in SCC since 1998 and began selling off its investment in 2012. It said that the sale wasn't related to its pending US$44bn union with Lafarge.
CRH assumes LafargeHolcim merger will proceed
19 March 2015Europe: Ireland's CRH is assuming that the LafargeHolcim merger will still happen, according to CRH chief executive Albert Manifold. "At this moment in time, we're working forward on the basis that the deal will close, the merger will happen," said Manifold. He added that he had spoken to both companies on 19 March 2015.
CRH has agreed to buy a number of mostly European assets from Lafarge and Holcim for Euro6.5bn so that Lafarge and Holcim can get antitrust clearance for their plan to merge. According to Reuters, CRH's shareholders voted to approve the acquisition on 19 March 2015 at its extraordinary general meeting. According to Manifold, the CRH vote was a procedural step that had to be done, regardless of the uncertainty at Lafarge and Holcim, as a failure to approve the asset purchase would have left CRH exposed to a potential Euro158m break-up fee.
Manifold also confirmed that if the merger should fail, the break-up fee would apply in the other direction. "Likewise, if other parties don't conclude this deal for whatever reason, we would then be in receipt of a break fee," said Manifold. "I'm not going to speculate on whether it is or isn't going to happen. There are discussions going on to decide what they want to do over the next couple of days," said Manifold, adding that CRH was interested in buying the assets even if the merger falls through.
According to CRH, the LafargeHolcim assets would transform CRH into the world's third-largest building materials supplier, the biggest in central and eastern Europe, and double its presence in emerging markets. CRH makes about half its sales in the US and wants more exposure to new markets such as the Philippines and parts of Europe it believes are beginning to recover.
Manifold said that CRH also has its eye on other acquisitions, should the purchase of Lafarge and Holcim assets fall through. "This deal is an important part of the strategy of CRH, but it is not the strategy of CRH," said Manifold.
Buzzi presents binding offer to buy SACCI
19 March 2015Italy: Buzzi Unicem has presented a binding offer to buy 99.5% of the Italian cement producer SACCI for Euro120m. The offer would be funded from cash and existing credit lines and would see Buzzi take on SACCI's debt. Buzzi said that it might in future pay an additional sum, depending on events like the achievement of a certain level of sales of the two companies and the possible sale of non-core activities.
HeidelbergCement completes sale of North American and UK building products business to Lone Star
13 March 2015US/UK: On 13 March 2015, HeidelbergCement completed the sale of its North American (excluding Western Canada) and UK building products business, Hanson Building Products, to Lone Star. The sale was originally announced on 24 December 2014. HeidelbergCement will receive more than Euro1.2bn, in addition to up to Euro95m payable in 2016, depending on business performance.
VTB bank selling Hrazdan cement plant
13 March 2015Armenia: VTB Bank (Armenia), a 100% subsidiary of Russian VTB Bank, is negotiating the sale of its cement plant in Hrazdan, according to the bank's chief executive Yuri Gusev.
In 2014 the bank provided the plant with a loan that was instrumental in resuming its operation. The plant's products are sold in Iran, Iraq, Europe and the Russian Federation. According to Gusev, VTB Bank (Armenia) wants the plant to continue its operation because the town of Hrazdan is a single-enterprise town. "VTB Bank (Armenia) feels its social responsibility for the fate of its residents," said Gusev. He added that the bank would assist the new owner of the cement plant to attract an international investor.
Reliance Infrastructure might sell Reliance Cement
13 March 2015India: Reliance Infrastructure, part of Anil Ambani-led Reliance Group, has decided to sell its cement business, Reliance Cement, to fund the acquisition of Pipavav Defence and Offshore Engineering, which it is acquiring for US$331m.
Reliance Cement is in talks with HeidelbergCement and Italcementi and has offered a 50% stake in the company. The prospective joint venture partner will also fund the company's cement capacity expansion, which is estimated to rise to 15Mt/yr by 2018. Details of the valuation of the possible deal are unknown. HeidelbergCement has operations in Damoh in Madhya Pradesh, Jhansi in Uttar Pradesh and Ammasandra in Karnataka. Italcementi is active in India via Zuari Cement.
Reliance Cement has a 5Mt/yr capacity cement plant in Maihar, Madhya Pradesh. As part of its expansion plan, it is setting up another 5Mt/yr plant in Maharashtra, which is set to be operational by 2017. It is also planning another 5Mt/yr of capacity to be operational by 2018, via a second line in Madhya Pradesh, a new plant in Karnataka or a new plant in Rajasthan.
China: SOCAM Development Ltd has agreed to sell its entire 45% stake in Lafarge Shui On Cement Ltd, its cement joint venture project, to its partner Lafarge for US$329m. Lafarge Shui On Cement has 32Mt/yr of cement production capacity in southwest China, in Yunnan, Sichuan, Guizhou and Chongqing Provinces. The sale would make Lafarge Shui On Cement a wholly-owned subsidiary of Lafarge.
SOCAM Development, which has been seeking to sell its cement operations since 2013, said that the disposal would allow it to focus on its construction business and to capture opportunities arising from a massive public housing programme recently announced by the Hong Kong government.
Ireland: CRH expects to receive regulatory decisions on a Euro6.5bn purchase Holcim and Lafarge operations as soon as March 2015. CRH chief executive Albert Manifold said that the acquired facilities would help CRH to expand in both North America and Europe, where it sees opportunities to expand its business.
"There are significant building needs and funding going to countries like Poland, Slovakia and Romania," said Manifold. He added that construction growth in those countries could be as high as 4%/yr over the next 10 years. Manifold said that CRH had already begun discussions with regulators in the various markets and expected decisions in March and April 2015. The acquisitions require the approval of CRH shareholders and an extraordinary shareholders meeting has been scheduled for 19 March 2015 for this purpose. Manifold said that CRH would continue to trim its portfolio and make further acquisitions.
Dalmia Cement increases its stake in OCL India to 74.6% for US$165m
26 February 2015India: Dalmia Cement has raised its stake holding in OCL India from 48% to 74.6% through an inter-se share transfer within the promoter group. It acquired a 4.13% stake from Mridu Hari Dalmia and a 22.45% stake from Mridu Hari Dalmia Parivar Trust at a share price of US$10.9 though open market transactions. The deal is worth US$165m. Since the deal involves inter-se transfer, it will not trigger an open offer for OCL India, despite breaching the creeping acquisition limit of a listed firm.
As part of consolidation and growth of the cement sector, Dalmia Bharat Group has been strategically acquiring assets and creating new assets in southern, eastern and northeastern India. OCL India has plants in Odisha and West Bengal. With Dalmia Cement increasing its stake in OCL India, Dalmia group will have 48% of its capacity in south India and the remaining 52% in east and northeast India.
"The move will help to create better operational synergies. It is a step forward in the commitment towards aligning all stakeholders' interests and overall value creations," said Dalmia Bharat. Dalmia Group expects to have a total capacity of 24Mt/yr in the 2015 – 2016 financial year through both greenfield and brownfield projects.