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Displaying items by tag: Acquisition
Jaypee nears end of Gujarat asset sale
12 December 2012India: The talks between Jaypee Group and Aditya Birla Group regarding the sale of the former's Gujarat based cement units have finally moved to the final stages, according to local media. It was reported that valuations of the deal, which had already resulted in failed acquisition attempts by others, have continued to cause delays.
Birla has been negotiating the cost of Jaypee's Gujarat cement units with the aim of paying a total of US$800m. The reports say that Birla had offered to purchase the units at US$160/t of installed capacity. This is significantly lower than the US$200/t paid during deals between Holcim and ACC.
Vertical rumour mill: Jaypee Group takeover tales
05 December 2012Step forward UltraTech Cement into the vertical rumour mill! The Indian cement producer is the latest company reported as wanting to buy Jaypee Group's cement business in Gujarat. It follows Italcementi, Aditya Birla and CRH, who announced in October 2012 that negotiations had been 'terminated' as the parties had been unable to agree terms.
This time the asking price has risen, with Ultratech allegedly offering US$160-165/t and Jaypee holding out for US$180-185/t. Whilst UltraTech hasn't publicly confirmed the move, it pointedly hasn't denied it either. The Aditya Birla Group subsidiary only commented to the Bombay Stock Exchange that it had not issued any press releases on the subject. Aditya Birla Group itself was reported in October 2012 as pursing interest at US$130/t for Jaypee's 9.8Mt/yr operations in Gujarat and Andhra Pradesh.
Given the number of rumours and cash-rich CRH's very public failure to strike a deal it seems likely that Jaypee has a specific price in mind and it's sticking to it. Prasad Baji of Edelweiss Securities stated in a television interview with CNBC-TV18 that he thought that the cement industry cycle was starting to look up. Crucially he predicted that India's capacity utilisation was set to rise from its current level of 78% to 82% despite price declines in the current quarter.
This is in sharp contrast with Fitch Ratings which rated the Indian cement industry with a negative outlook at the start of 2012 and reports in late May 2012 that capacity ultilisation had actually fallen from 76% to 71%. Since then ICRA Research reported in late September 2012 that it expected Indian capacity ultilisation to stick to 76% for 2012 with prices showing 'resistance' in some regions to cost increases due to rising input costs.
With all this in mind it seems likely that UltraTech will join the growing list of Jaypee's spurned buyers when it fails to reach terms or when the rumours simply fizzle out. However if UltraTech does strike a deal the Indian industry will be the one to watch in 2013. According to data in the Global Cement Directory 2013, an acquisition of nearly 10Mt/yr production capacity would boost UltraTech's capacity to 62Mt/yr making it the 12th largest cement company in the world.
UltraTech fails to deny Jaypee takeover rumours
05 December 2012India: UltraTech Cement has reported to the Bombay Stock Exchange that it has not issued any press releases concerning rumours in the Indian press that it is in talks to buy Jaypee Group's cement business in Gujarat. It added that the company does not comment on market speculation. Jaypee has not commented.
Indian press reported that UltraTech is planning to buy Jaypee Group's cement business in Ahmedabad for US$700- 890m by the end of 2012. UltraTech is allegedly 'keen' to buy Jaypee's 4.8Mt/yr Gujarat capacity at US$160- 165/t. Jaypee want to sell it at US$180-185/t.
Jaypee Group is the India's third largest cement maker with an installed capacity of 33.5Mt/yr. Jaiprakash Associates, the flagship company of the group, holds the majority of the cement business. However, operations in Gujarat and Andhra Pradesh, which have a total capacity of 9.8Mt/yr, are run by Jaypee Cement, which was hived off six months ago for monetising the asset. UltraTech Cement is a part of the US$24.5bn diversified Indian conglomerate Aditya Birla Group. The company, along with its subsidiaries, has a cement production capacity of 52Mt/yr.
Adelaide Brighton buys 30% of Cementir Holding unit
05 December 2012Australia: Australian building materials producer Adelaide Brighton will buy a 30% stake in a Malaysian white clinker and white cement producer, Aalborg Portland Malaysia (APM) for US$29.7m. APM is owned by Aalborg Portland A/S, a subsidiary of Italian entity Cementir Holding. The deal also secures a 10 year supply agreement with APM and continues Adelaide Brighton's efforts to access raw material given its 'maxed-out' production capability.
"The high dollar, rising power costs, the carbon tax and increasing labour costs make building a new plant in Australia too high in terms of capital expenditure costs," said Adelaide Brighton's chief financial officer Michael Kelly. He added that Adelaide Brighton needs to secure imports and that the acquisition provides a strategic position in Asia for the company.
APM is also considering a US$18.6m expansion of the plant to increase white clinker production capacity from about 2015. Imports of cementitious products, including grey and white clinker, cement and blast furnace slag are expected to increase from approximately 1.6Mt/yr in 2012 to more than 2Mt/yr in 2016.
Buzzi purchases more of Dyckerhoff
26 November 2012Italy/Germany: German cement maker Dyckerhoff has announced that its parent company, Italy's Buzzi Unicem, has agreed to buy additional ordinary and preferred shares in it, raising its total share capital in the firm by 3.6% to 96.6%.
The German company did not reveal the value of the transaction but specified that during the current year and including the most recent agreement Buzzi Unicem had bought shares in it for some Euro71.7m.
As a shareholder of at least 95% of Dyckerhoff, Buzzi Unicem is entitled, under the German law, to start a 'squeeze-out' procedure for the remaining shares that it does not already own. However, it has not yet made any final decision on such a move, according to Dyckerhoff.
Lafarge and Tarmac to sell UK assets to Mittal Investments
16 November 2012UK: Lafarge SA and Anglo American plc have announced they have agreed to sell a portfolio of Tarmac and Lafarge construction materials operations in the UK and Tarmac's 50% ownership interest in Midland Quarry Products Limited (MQP) to Mittal Investments, the private investment vehicle of the Lakshmi N Mittal family.
The consideration paid by Mittal Investments for the assets is Euro338m including up to Euro37m based on the performance of the underlying assets over the next three years. In addition, an estimated amount of Euro16m relating to working capital of the divested assets not transferring with the business will be released as funding to the newly formed joint venture between Lafarge and Tarmac.
The divestments, which are conditional upon regulatory approval, comprise a cement plant in Hope, Derbyshire, with a capacity of 1.4Mt/yr and related depots; a network of 172 ready mix concrete plants; five aggregates quarries, two asphalt plants, one marine aggregates wharf and one rail-linked aggregates depot; the sale of Tarmac's 50% ownership interest in MQP, which is also subject to regulatory approval, and a right of pre-emption in favour of Hanson Quarry Products Europe Limited.
The sale of these assets is the principal condition to receiving final clearance from the Competition Commission for the formation of a 50:50 joint venture, which will combine Tarmac's and Lafarge's cement, aggregates, ready-mixed concrete, asphalt and asphalt surfacing and maintenance services and waste services businesses in the United Kingdom in a joint venture (JV).
Completion of the JV is expected in early 2013 and, once established, the companies say that it will create a new, leading UK construction materials company, with a portfolio of high quality assets, drawing on the complementary geographical distribution of operations, the skills of two experienced management teams and a portfolio of well-recognised, innovative brands.
Lafarge said that a further announcement would be made in due course.
Semen Gresik buys Thang Long Cement
15 November 2012Vietnam: Indonesian cement producer Semen Gresik has bought the Vietnamese cement company Thang Long Cement. The purchase was included in a conditional sales purchase agreement between Semen Gresik and Ha Noi General Export Import Joint Stock Company (Geleximco). Semen Gresik refused to state the value of the deal or the percentage of shares it had acquired.
"I am afraid we cannot mention it right now, but we are the majority. We will let you know in a month from now," said Dwi Sutjipto, Semen Gresik CEO. With the acquisition Semen Gresik hope to increase its market share and production capacity in Vietnam.
Thang Long Cement has a total production capacity of 2.3Mt/yr. Two new factories are expected to open soon, in the Quang Ninh and Binh Phuoc provinces, increasing the company's total capacity to 6.5Mt/yr.
Himenviro acquires Intensiv-Filter
24 October 2012Germany: Indian filter manufacturer Himenviro has invested in Intensiv-Filter & Co KG. On 1 October 2012 Himenviro acquired around 60 employees at Intensiv-Filter's Velbert-Langenberg site. The German industrial dust specialist declared insolvency in May 2012.
"The competence and experience of the Intensiv-Filter team combined with the technical know-how of the investor has set the course for a long-term successful filter technology company," said temporary insolvency trustee Dr Marc d'Avoine. Part of the agreement between the insolvency administrator and the Himenviro was to maintain the employment of Intensiv-Filter's experienced workforce.
CRH terminates Jaypee acquisition
09 October 2012Ireland/India: International building materials group CRH has said that negotiations with Jaypee Cement Corporation have been terminated because the parties were unable to agree terms.
On 7 August 2012 CRH announced that it had entered into talks with Jaypee regarding the possible purchase by CRH of an equity stake in Jaypee's Gujarat cement business. The operations in Gujurat consisted of clinker plants with a total capacity of 3.6Mt/yr. There are also two cement grinding plants with a total capacity of 2.8Mt/yr.
Dalmia Cement buys Adhunik Cement for US$106m
28 September 2012India: Dalmia Cement Bharat, a subsidiary of Dalmia Bharat Enterprises, has signed an agreement to acquire Adhunik Cement for US$106m. The acquisition and consideration will be made in multiple tranches, subject to adjustments and various other terms and conditions.
Adhunik Cement is a joint venture between two Calcutta–based companies, Adhunik Group and MSP Group. Previously the company invested US$133m to set up a 1.5Mt/yr cement plant in the limestone-rich Jaintia Hills in Meghalaya. It also set up a 25MW coal-based captive power plant for the site.
Dalmia Bharat Enterprise is a cement manufacturer with plants in Tamil Nadu and Andhra Pradesh with a capacity of 9Mt/yr. The company is engaged in the business of cement, thermal power and other businesses.