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Displaying items by tag: Cimpor
Cade approves Camargo's Cimpor share purchase
05 July 2012Brazil: Brazil's competition regulator, Cade, has approved Camargo Corrêa's June 2012 purchase of a controlling stake in the Portuguese cement maker Cimpor subject to several conditions. The main requirement is that Votorantim, a competitor of Camargo in the Brazilian cement market, must sell its own stake in Cimpor. Votorantim and Camargo Correa both bought shares in Cimpor in 2010.
The Cade decision is expected to result in an agreement between Camargo and Votorantim whereby Camargo gets Cimpor assets in Brazil and Votorantim gets Cimpor assets abroad including those in Spain, Turkey, China and India.
With 40% of Brazil's cement market, Votorantim is Brazil's largest cement maker. Through their shareholdings in Cimpor, both Camargo and Votorantim previously increased their share of Brazil's market. Cade also said that Camargo must sell some assets in Brazil's São Paulo state, the country's most populous and industrially-developed region, and create a technological development programme.
Under the terms of the Cade decision, Votorantim's exit from Cimpor will be carried out either by selling its Cimpor stock back to France's Lafarge or by a sale to a third party, according to Alessandro Octaviani Luis, the Cade board member who wrote the decision. "We take Votorantim's willingness to negotiate its departure from Cimpor as a symbol of goodwill to Cade," said Vinicius de Carvalho, Cade's president.
Luis had recommended rejecting the initial Votorantim purchase of Cimpor on the grounds that it would raise Votorantim's dominance of Brazil's cement market, saying that while it has less than half of Brazil's total market, in some states, Votorantim's market share is as high as 70%. "In the cement market, Votorantim does not have the means to grow through acquisitions," he said. Votorantim said later in a statement that it bought its Cimpor stake to expand internationally and it was never its intention to remain a partner in Cimpor with Camargo.
The Cade decision comes as two decades of consolidation in Brazil's cement and concrete markets have led to limited competition and kept prices high. The market conditions have created problems for a government seeking to spend hundreds of billions of dollars in road, port and housing construction and for companies expanding mines, farms, factories and transport infrastructure to supply soaring Asian demand for commodities.
Cimpor bought by Camargo Corrêa
22 June 2012Portugal: The Brazilian industrial conglomerate Camargo Corrêa has completed its takeover of Portugal's Cimpor on 20 June 2012 and now controls 94.8% of the cement-maker.
The success of the move was largely expected by analysts who will now look at the terms in which the company's assets will be split between Camargo and its Brazilian rival Votorantim. The deal includes an asset swap with Votorantim, Cimpor's second largest shareholder.
Camargo will integrate its South American and Angolan cement operations into Cimpor. Votorantim will then have the opportunity to buy Cimpor's operations in China, India, Morocco, Tunisia, Turkey and Peru and part of its Spanish business at a set price defined by independent auditing companies.
Camargo, which was already the largest single shareholder in Cimpor with a 33% stake, launched a Euro2.5bn bid for the rest of the company in March 2012. Portugal's state-owned bank CGD, investor Manuel Fino and Millennium BCP's pension fund all accepted Camargo's Euro5.50/share offer.
The Portuguese government has said a Cimpor deal will help CGD deleverage and defended Camargo's bid from suggestions that it was against the national interest. Cimpor has been one of Portugal's most successful and internationally-diversified companies.
Portugal: Portugal's securities regulator CMVM has said that a takeover bid by Brazil's construction group Camargo Corrêa for Portuguese cement maker Cimpor will involve an asset swap to buy out another Brazilian shareholder that will get part of Cimpor's overseas business. CMVM approved the previously announced Euro5.50/share bid under these terms and said that the remaining shareholders in Cimpor would have until 19 June 2012 to decide whether to sell their stakes.
Camargo Corrêa, which is already the largest single shareholder in Cimpor with a 33% stake, launched a Euro2.5bn bid for the rest of Cimpor in March 2012, in a move defended by the Portuguese government. CMVM said that Camargo and the other Brazilian shareholder Votorantim had agreed that the deal would involve an asset swap, as expected by analysts.
Camargo will exchange its cement and concrete business in South America and Angola for Cimpor's overseas assets, including in China and India but excluding Brazil, also taking hold of 21% of Cimpor's net consolidated debt. Camargo will then swap the assets it received for Votorantim's stake in Cimpor.
The decision by CMVM may address some concerns by Brazil's antitrust regulator Cade, which has been analysing Votorantim and Camargo Corrêa's purchases of stakes in Cimpor since 2010, when the two frustrated an acquisition attempt by Brazilian steelmaker CSN. Camargo Correa's buyout of Cimpor could help competition in Brazil by reducing Votorantim's market share.
Cade makes recommendations for Cimpor bid
23 May 2012Brazil: Cade, the Brazilian anti trust agency, has recommended that the acquisition of Portuguese cement producer Cimpor by Camargo Corrêa should be approved but that that Votorantim Cimentos should divest its stake in Cimpor.
In 2010, Camargo Corrêa teamed up with industrial conglomerate Grupo Votorantim to acquire 54% of Cimpor, blocking a bid by Brazilian steelmaker CSN in the process. Camargo Corrêa has since raised its stake in Cimpor to nearly 33%, later launching a Euro2.5bn bid for the rest of Cimpor in March 2012 at Euro5.50/share.
Camargo Corrêa's buyout of Cimpor could help competition in Brazil by reducing Votorantim's market share, Cade chief Olavo Chinaglia told the press in April 2012. Votorantim may have to sell some of its Brazilian cement assets to reduce its market concentration. The conglomerate's market share is about 40% nationally but reaches nearly 90% in some regions.
In November 2011 Cade found that Votorantim, along with Camargo Corrêa and four other rivals, colluded to fix prices, hampering competition in the Brazilian cement market during a construction boom. Further approval of Camargo Corrêa's purchase may depend on certain conditions, such as selling assets in some markets and avoiding participation in other cement companies.
Camargo rejects Cimpor merger proposal
16 May 2012Portugal: Brazilian construction group Camargo Corrêa, which is trying to take over Portugal's top cement maker Cimpor, has rejected Cimpor management's counter-proposal for a merger with Camargo's cement unit, saying it was 'unrealistic.'
Cimpor's board, which had earlier said the price of Euro5.50/share offered by Camargo was too low, said that a merger would widen Cimpor's portfolio and create better synergies, preventing the withdrawal of another Brazilian shareholder, Votorantim. Its proposal involves paying up to Euro1.00/share in dividends to Cimpor shareholders.
Camargo's unit Intercement responded that the proposal was "untimely, unrealistic and inappropriate as it does not address various interests at play at Cimpor that have already been publicly expressed."
Two key Cimpor shareholders, including state-controlled bank CGD, have already said they are prepared to sell their stakes under Camargo's terms and most analysts expect Camargo to acquire Cimpor at some point. Camargo is already the largest single Cimpor shareholder and the two stakes would give it control. The Portuguese government has said a Cimpor deal has to help CGD to deleverage and defended Camargo's bid from suggestions it was against the national interests. Along with other Portuguese banks, CGD is under pressure to improve its capital position under the terms of a Euro78bn EU/IMF bailout for Portugal.
Previously, Portuguese conglomerate Semapa proposed that some Cimpor shareholders should form a joint holding company to try to keep the company in Portuguese hands. The Portuguese government said that such a move would not help deleverage CGD.
Camargo Corrêa details bid for Cimpor
09 May 2012Brazil: Brazil's second largest construction group Camargo Corrêa has said it would offer cash to take over the Portuguese cement maker Cimpor and it would preserve the company's name and strategic outlook.
Camargo Corrêa's cement division, InterCement, has offered clarification on its bid, first announced on 30 March 2012. In a statement, Camargo Corrêa maintained its bid of Euro5.50/share to acquire the 67.1% of Cimpor it does not already own. However it added that it would pay, "in cash and immediately to all shareholders that adhered to the offer."
It said it would maintain the brand name of Cimpor, preserve its long-term strategic outlook and keep the company's decision-making offices in Portugal, as it tried to win over support for the takeover bid. In its initial response the takeover bid, Cimpor's board said that Camargo's bid was too low and lacked details on its plans for the company's future.
Treasury Secretary defends Camargo Corrêa bid
02 May 2012Portugal: Portugal's Treasury Secretary Maria Luis Albuquerque has defended the takeover bid by Brazil's Camargo Corrêa for Portuguese cement maker Cimpor from suggestions that it was against Portuguese national interests and that the price offered by Camargo Corrêa was too low.
"This operation appears to us the best alternative for the company," said Albuquerque, speaking to a parliamentary committee. "It safeguards the national interests in the most attractive form that is possible to secure." Opposition Socialists had demanded that the government answer questions on the takeover.
Camargo Corrêa, Brazil's second-largest construction group, launched a Euro5.5/share takeover bid at the end of March 2012 for the 67.1% of Cimpor that it does not already own. Cimpor's board has said the bid is too low and lacks detail on its plans for the company's future.
Two key Cimpor shareholders, including the state-run bank CGD, have already said they are prepared to sell their stakes under Camargo Corrêa's terms and many analysts expect the bid to succeed. Along with other Portuguese banks, CGD is under pressure to improve its capital position under the terms of a Euro78bn EU/IMF bailout for Portugal.
Albuquerque said that Camargo Corrêa's bid would make Cimpor's shareholder structure more stable, preserve the company's listing in Lisbon and 'bring liquidity advantages to the national economy, allowing Cimpor to refinance its debt."
Votorantim decision on Cimpor imminent
25 April 2012Portugal: Votorantim, Brazil's largest cement producer, is set to decide whether it will accept Camargo Correa's takeover bid for Cimpor and sells the 21.2% it owns in the company. Camargo, Brazil's second-largest construction group, launched a Euro5.5 a share takeover bid for the 67.1% of Cimpor it does not own at the end of March 2012.
"There is no deal with Camargo. Votorantim is considering and analysing all the alternatives," said CEO Walter Schalka outside of Cimpor's shareholder meeting in Lisbon on 20 April 2012. "We will decide in the next few days," he added.
The meeting was suspended on the request of Camargo, which said that the assembly should only occur after its takeover bid process is concluded. There is still no set deadline for the bid. Cimpor's board previously said that Camargo's bid was too low and was lacking detail on its plans for the company's future.
Earlier in April 2012, Portuguese conglomerate Semapa proposed that some Cimpor shareholders should form a joint holding company to try to keep the company in Portuguese hands. It said, however, that its offer does not represent a counterbid. Votorantim is Cimpor's second-largest shareholder.
Portugal: Cimpor says a takeover offer from Brazil's Camargo Corrêa is too low and lacks detail on its plans for Cimpor's future. The leading Portuguese cement-maker would not recommend to shareholders whether they should sell or keep their stakes.
Camargo, Brazil's second-largest construction group, launched a Euro5.5/share takeover bid for the 67.1% of Cimpor it does not own at the end of March 2012. Analysts had expected the bid to succeed after two key shareholders said they were prepared to sell. Yet the board's opinion, given in a statement issued late on 13 April 2012, could complicate the process or require sweetening of the bid. Camargo is already the largest single Cimpor shareholder and the outstanding shares it does not own in Cimpor are valued at around Euro2.4bn.
Cimpor's statement said the offer does not include a premium for taking control of the company and lacks detail on what would happen to Cimpor's asset portfolio, debt profile and dividend policy. "For the above reasons, the board is not in a position to recommend to shareholders to tender their shares, as the price is low and significantly undervalues Cimpor, and, in the absence of adequate information on the future of Cimpor post-offer, neither may the board recommend to shareholders to maintain their investment," it said.
Portuguese conglomerate Semapa earlier proposed that some Cimpor shareholders should form a joint holding company to try to keep the company in Portuguese hands. Its offer does not represent a counter-bid, but Semapa said it implies a price of Euro5.75/share.
Camargo has said the price it offered is fair, expecting most Cimpor shareholders to use this 'good opportunity', but would not say if it would consider sweetening the offer. It also said in the statement that the price implied in Semapa's complex proposal could not be compared to Camargo's direct bid. It said that Semapa's arrangement, if it were to go ahead, would have to trigger a compulsory competing bid by those who join the Semapa-proposed holding company.
Brazilian twist
11 April 2012Camargo Corrêa's ongoing bid for Cimpor must be creating nightmares for Brazil's anti-cartel authorities.
If the takeover goes through, Camargo Corrêa's Brazilian market share will rise from 24% to 37% according to data from the Global Cement Directory 2012. Together with industrial conglomerate Grupo Votorantim, who already own 21% of Cimpor, this share would amount to 72% of the country's total cement capacity.
As covered in this week's Global Cement Weekly #44 Jose Barros Franco, chief executive of Intercement a subsidiary of Camargo Corrêa, has explicitly denied that Camargo had a pre-agreement with Votorantim to split up Cimpor assets. However, he did not rule out a deal in the future to jointly manage the company. This implies that companies representing nearly three-quarters of the Brazilian cement market might be working together to at least some degree!
In October 2011 Camargo Corrêa denied that it was in talks to buyout Cimpor. According to one source at that time, Camargo Corrêa planned to take over Cimpor's operations in Brazil while Votorantim was considering taking assets outside of Brazil. Currently analysts expect the same thing to happen now if the takeover goes through, especially given any possible anti-competitive attention in Brazil.
With operations in four continents Portugal's Cimpor holds 77% of its global capacity outside of Brazil. If the takeover does actually happen, then the key question is this: how much of Cimpor's international operation does Votorantim want in return for helping its competitor Camargo Corrêa to grow back at home in Brazil?