Displaying items by tag: Merger
Lafarge and Holcim notify EC over merger
28 October 2014Europe: Lafarge and Holcim have formally notified the European Commission (EC) of their proposed merger in order to obtain regulatory approval. With this notification, Holcim and Lafarge have now completed all necessary notifications with regulatory authorities worldwide.
During pre-notification discussions, which Lafarge and Holcim have had with the EC, the list of proposed assets for divestment in Europe has been slightly amended. Compared with the list of assets presented on 7 July 2014, the two companies now propose to retain Lafarge's Mannersdorf plant in Austria and to divest all of Holcim's operations in Slovakia.
In the rest of the world, the proposed list of assets remains the same, with the exception of the Philippines, as announced by the boards of directors of Lafarge Republic Inc. and of Holcim Philippines Inc.
In parallel to the regulatory process, Holcim and Lafarge are in ongoing negotiations with potential buyers of the assets that are proposed for divestment.
Lafarge and Holcim about to request EU approval to merge
10 October 2014Europe: Lafarge and Holcim are about to request approval from the European Commission (EC) for their planned merger, according to Lafarge CEO Bruno Lafont.
"We are indeed very close to EU notification," said Lafont. He added that talks with Brussels had been constructive and that the companies were 'well on track' to close the deal in the first half of 2015.
Holcim and Lafarge enter talks with EU to expedite merger
19 September 2014Europe: Holcim and Lafarge are holding talks with the European Union (EU) in a bid to obtain fasterapproval of their merger plan. Holcim and Lafarge plan to iron out possible EU concerns over the merged company's market power before filing for approval of the deal, the step that starts the EU's review.
Addressing EU issues at an early stage may allow regulators to approve the deal without opening an in-depth probe, which could add about four months to the process. The companies announced a wave of divestments in July 2014 in an attempt to ward off regulatory obstacles. Planned sales are weighted toward Europe, cutting exposure of both companies to the slower-growing region. European plants earmarked for divestment include sites in Austria, France, Germany and Romania. Under the EU's merger-review process, most deals are cleared at the first hurdle.
LafargeHolcim merger approved in Singapore
05 September 2014Singapore: Lafarge and Holcim have received approval from the Competition Commission of Singapore (CCS) to merge their businesses in the country.
Holcim (Singapore) and Lafarge Cement Singapore overlap in the manufacture and supply of ready-mix concrete and grey cement. Under Singapore's Competition Act, firms are not allowed to merge if the resulting entity could lead to a substantial lessening of competition in any market. However, Lafarge and Holcim argued that they would not have substantial market power after the merger. Grey cement is also imported to Singapore by Holcim primarily for its own consumption and is supplied to third parties only to a limited extent, they said.
After a public consultation exercise, the CSS issued its decision that 'The transaction is unlikely to lead to substantial competition concerns in Singapore.' This was because the firms are not major players in Singapore, despite being major names in overseas markets. The CSS added, "There is significant localised competition in the relevant overlapping markets in Singapore."
There are also alternative suppliers that can meet any additional demand for ready-mix concrete, thereby limiting the market power of the merged companies. With a number of suppliers in the market, cooperation among firms to raise prices will be harder as well, according to the CSS.
Dalmia Bharat and OCL India in merger talks
27 August 2014India: Dalmia Group is looking at a merger of its listed cement companies Dalmia Bharat and OCL India, according to industry sources. As part of the restructuring plan, Dalmia Bharat will also merge its unlisted arm, Dalmia Bharat Enterprises, with itself. Global private equity firm KKR owns a 14.5% stake in Dalmia. Bharat Enterprises will eventually own a minority stake in the merged listed entity.
Dalmia Bharat and OCL India have revived plans of the merger after a failed attempt in 2008. Dalmia Bharat owns 48% stake in OCL India and both companies together have a cement capacity of close to 20Mt/yr. The new entity would be the fourth largest cement producer in the Indian cement industry.
Russia: Russia's Federal Antimonopoly Service (FAS) has made a decision to extend the consideration period for Holcim's application for the right to direct the following businesses: OAO Lafarge Cement (Moscow), FIANT LLC (Moscow), Lafarge Aggregates & Concrete LLC (Republic of Karelia), Drilling and Blasting Company LLC (Republic of Karelia), Bolshoy Massiv Quarry LLC (Republic of Karelia) and Tekhnobud Klesovsky Quarry of Non-Metallic Minerals LLC (Ukraine). The right to direct the businesses would stem from Holcim's acquisition of 66% of the shares in Lafarge.
Lafarge is licensed for the production, storage and application of industrial explosive materials, being engaged in the activities provided for by Article 6 of the Federal Law on Procedures for Foreign Investments in Business Entities of Strategic Importance for the National Defense and State Security. Therefore, Lafarge qualifies as a business entity of strategic importance for the national defence and state security. Therefore, the deal applied for requires prior approval as provided for by Russia's investment law.
World: Holcim and Lafarge have begun to formally notify regulators as to how they will tackle antitrust concerns, according to Holcim's CEO Bernard Fontana. The two companies have filed formal notifications, which generally include information on what the combined entity will look like and steps it will take to prevent it from abusing its size, in about two-thirds of the 15 jurisdictions that require a review of the proposed deal. Those include the US, Canada, Mexico, India and Russia, among others.
Fontana said that discussions with the European Union (EU), where the two companies have some of their greatest overlap, were at an 'advanced' stage. He added that he expects formal notification to be made in the summer of 2014. "We are on track," said Fontana, who has run Holcim since 2012. "We will do what we planned to do."
Holcim and France's Lafarge have moved quickly to satisfy regulators since unveiling their proposed transaction, which will create a cement company with combined sales of Euro31.8bn. The deal is expected to face significant challenges from competition authorities. EU antitrust chief Joaquin Almunia has already said that the deal is likely to face an extended probe by his agency.
Fontana said that the list of proposed businesses and plants it would sell in order to satisfy regulators, which it announced recently, would maintain entire businesses that function well and generate the greatest proceeds from the sale process. According to Fontana, Holcim and Lafarge have received more than 100 expressions of interest from potential buyers of the assets.
"We have had marks of interest from all kinds of prospective buyers," said Fontana. He added that potential buyers include private-equity groups and companies in the cement industry, including some from emerging markets. Holcim and Lafarge could also choose to sell some assets via initial public offerings.
Elementia in talks to buy out Lafarge in Mexico
15 July 2014Mexico: Mexico's cement producer Elementia is in talks to buy out its joint venture partner Lafarge, according to local media. Elementia has the right to buy Lafarge's 47% stake under an option described in the original terms of the partnership. Lafarge is said to be keen to avoid competing with itself in Mexico after agreeing to the US$40bn merger with Holcim, which already operates in the country.
The stake has been valued as high as US$500m. However, it is unlikely to attain that high a price because Lafarge has limited bargaining power and Elementia already has majority and management control of the joint venture. Lafarge may be forced to offer its stake at a discount to convince Elementia to buy. Lafarge and Holcim's recent proposed asset divestment list did not include the Mexican joint venture, which has a cement production capacity of 2Mt/yr.
Elementia sells cement in Mexico under the brand Cementos Fortaleza. Buying out Lafarge would bolster Elementia's position in Mexico, where cement demand is predicted to grow on the back of economic overhauls that were approved in 2013.
President approves cement plant merger
11 July 2014Belarus: The president of Belarus, Alexander Lukashenko, has approved the merger of the country's cement plants into a holding company under the name Belarusian Cement Plant. It will include Krasnoselskstroymaterialy, Krichevtsementnoshifer and Belarusian Cement Plant. The holding company will mainly focus on export growth, as Belarus' cement output capacity is currently more than double the domestic demand. Belarusian cement plants manufactured 5.05Mt of cement in 2013, up by 3.1% year-on-year. Belarus exported 1.37Mt of cement in 2013, up by 36.5% year-on-year.
Holcim assumes control of Bamburi Cement
11 July 2014Kenya: Holcim is set to acquire effective control of Kenya's Bamburi Cement Company Ltd as part of the planned merger between Holcim and Lafarge. Lafarge is Bamburi's parent company. Bamburi said that the proposed combination would not effect any changes to the ownership of Bamburi and that the local outfit would remain listed on the Nairobi Securities Exchange (NSE).
"The parties do not wish to see any change to the status of Bamburi as one of Kenya's leading industrial companies listed on the NSE," said Holcim. Holcim added that maintenance of the listing on the NSE and the wide-scale investment from the Kenyan public in Bamburi's shares is a key ingredient to the success of Bamburi.
Lafarge owns 58.6% of Bamburi's total issued share capital through two subsidiaries: Fincem Holding Ltd (29.3%) and Kencem Ltd (29.3%). Kenyan institutions and individuals own an estimated 32.17% of Bamburi shares. Currently Holcim does not own any shares directly or indirectly.