Displaying items by tag: Acquisition

Europe: Cemex has signed binding agreements with Holcim regarding the series of transactions that was originally announced on 28 August 2013.

The main scope of the transactions in Germany and the Czech Republic remain unchanged: Cemex will acquire all of Holcim's assets in the Czech Republic and will divest its assets in western Germany to Holcim. In Spain, Cemex will acquire Holcim's 0.85Mt/yr capacity Gador cement plant and its 0.9Mt/yr capacity Yeles cement grinding plant. Holcim will keep all of its other operations in Spain.

As part of these transactions, Cemex will pay Euro45m in cash to Holcim. Once the transactions are closed, Cemex expects a recurring improvement in its earnings before interest, taxes, depreciation and amortisation (EBITDA), including synergies, of about US$20m to US$30m. These transactions are expected to close during the first quarter of 2015.

South Korea: Asia Cement is considering the acquisition of South Korea's Ssangyong Cement. According to investment banking sources, Asia Cement is currently discussing the feasibility of purchasing a 46.8% stake in Ssangyong Cement for US$762m.

In terms of shipments, Asia Cement is the seventh-largest cement producer in South Korea with a market share of 6.9% in 2013. During 2013 it posted sales revenue of US$418m. During the same period, Ssangyong Cement recorded US$1.96bn in sales revenue and a market share of 22.0%.

India: The Aditya Birla Group has submitted bids to purchase global assets being divested from the LafargeHolcim merger. UltraTech and other companies that belong to Birla have put in bids for cement units of Lafarge and Holcim in Brazil and the Philippines at an enterprise value of US$1.4bn. The group had identified Brazil as a major place for expansion three years ago. The Philippines was among the overseas countries where the group started operations several years ago.

Birla is competing with rival cement companies and private equity funds for the units. Germany's HeidelbergCement has teamed up with Votorantim Cimentos of Brazil while Cemex has joined hands with CRH plc. Eurocement is also in the race. Birla's move is part of its overall plan to increase its cement capacity to 70Mt/yr by early 2016 from 63Mt/yr currently.

Over 50% of Birla's revenues come from its overseas operations. According to a consultant involved with the deal, Birla will be unable to bid for LafargeHolcim assets in some of the market, including India, as a purchase will lead to monopoly in those markets.

India: Sagar Cements has received final approval for the acquisition of the 100% equity stake in BMM Cements, which owns a 1Mt/yr capacity cement plant and a 25MW captive thermal power plant in Gudipadu, Andhra Pradesh.

India: Jaiprakash Associates Limited is selling its 2.1Mt/yr capacity split grinding plant at Bhilai, Chattisgarh to Shree Cements Limited for an enterprise value of US$293.
The deal is expected to be completed in October 2014.

Bhilai Jaypee Cement Limited is a joint venture between Jaiprakash Associates, which holds 74% stake in the unit and the Steel Authority of India Ltd (SAIL), which holds 26%. The cement plant, which has revenues of US$130m/yr, has US$97.5m of debt. After adjusting for this, the equity value of the deal is US$179 – 195m.

Colombia: Directors at Cementos Argos have given the green light for an ordinary bond issuance of up to US$495m to be used as working capital and to swap financial liabilities. The company will have three years to carry out the issuance, although it will most likely do so in the coming months.

Previous issuances by Cementos Argos, such as those carried out in 2012 to raise US$495m, have helped the firm expand in Colombia, Latin America and the United States. Argos revealed in August 2014 that it is considering buying Holcim and Lafarge assets in the region, particularly Mexico and Brazil, and has announced that it will also build a US$450m plant.

Brazil/UK: Lafarge Tarmac, the UK's largest cement firm, may be bought by the Latin American conglomerate Votorantim. The mooted deal comes as giant cement firms Lafarge of France and Holcim of Switzerland sell off assets as they pursue their merger, announced in April 2014.

India: Sagar Cements is planning to acquire BMM Cements, which has a 1Mt/yr cement factory and a 25MW captive power plant in Andhra Pradesh. Sagar intends to use the US$70.5m it has raised by selling a 47% stake in France's Vicat for the acquisition.

Turkey: Turkish conglomerate Sabancı Holding plans to bid for some of the assets that cement makers Lafarge and Holcim must sell to steer their mega-merger past competition watchdogs, according to Reuters.

"Sabancı Cement Group is interested in these sales. Preparations are being made to make a bid in December 2014. Before the bid, preliminary information has been obtained on the assets so it can be assessed," said a source quoted by Reuters.

Mexico: Lafarge has announced plans to sell its 47% stake in its Mexican cement business to Mexico's Elementia SA de CV for US$225m in cash. Lafarge and Elementia operate three cement plants in Mexico, with the former owning 53% of their joint venture. The transaction is pending regulatory clearance and has to fulfil a number of customary closing conditions. Lafarge said that the proceeds from the sale would be used to reduce the company's net debt.