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Displaying items by tag: Takeover
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.
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.
Brazil: Brazil's second-largest construction group Camargo Corrêa does not expect to have to sell any assets if its buyout of Portuguese market-leader Cimpor goes ahead as it hopes. It expects Cimpor to gain scope and global reach as its unit.
Jose Barros Franco, chief executive of Intercement, a subsidiary of Brazil's second-largest construction group Camargo Corrêa, has stated that the bid price of Euro5.5 per Cimpor share was 'fair' but he would not say if the company would consider sweetening the offer. Portuguese conglomerate Semapa has made a proposal to major shareholders in Cimpor to try to keep it in Portuguese hands by forming a joint holding company. It does not represent a counter-bid.
"We pay close attention to all manifestations of interest, but we believe that our offer is a good opportunity for all shareholders and will subsequently transform Cimpor into a bigger company than it is today, implying a significant entry of foreign investment to Portugal," Barros Franco added. He denied market talk that Camargo had a pre-agreement with another Brazilian shareholder in Cimpor, the country's largest cement producer Votorantim, to split up Cimpor assets, but did not rule out a deal in the future to jointly manage the company.
Analysts expect Intercement to take over the bulk of Cimpor's capital, but say Votorantim is likely to keep its 21.2% stake, which would allow it to carve out part of Cimpor's international business later, avoiding problems with Brazil's competition regulator.
"There is no pre-agreement. We believe that our bid is a good opportunity for all shareholders. Still, we can't rule out the possibility of a future agreement to allow for a better management of the company and addressing competition issues in Brazil," Barros Franco wrote. Camargo holds a 32.9% stake in Cimpor.
"For now we do not expect any asset sales. We are at the disposal of the antitrust authorities to provide all the necessary explanations," he said.
Analysts have previously said that Cimpor may have to sell at least one mill to address Brazilian antitrust regulator's concerns. Votorantim would have to sell various plants. If Camargo Corrêa took over 100% of Cimpor, it would double its market share in Brazil to near 20%, reducing Votorantim's dominant lead.
Camargo Corrêa makes bid for remaining Cimpor stake
03 April 2012Brazil: Brazil's Camargo Corrêa has launched a bid for the 68.1% stake in Portugal's Cimpor that it does not already own. Camargo Corrêa Cimentos, the Brazil-based cement unit of which is that nation's fifth-largest cement producer, currently controls 32.9% of Cimpor.
It is thought that Camargo Corrêa may be taking advantage of depressed valuations in the troubled Portuguese economy to win control of the company. Cimpor is itself the fourth-largest cement producer in Brazil. In 2010, Camargo Corrêa teamed up with industrial conglomerate Grupo Votorantim to thwart Brazilian steelmaker CSN's bid for full control of Cimpor. Votorantim holds 21% of Cimpor.
This new move may open up the spectre of a lengthly and interesting anti-trust approval if the deal is accepted by Cimpor, especially given that Camargo Corrêa, Votorantim and four other producers were accused of price-fixing in the Brazilian cement market in November 2011.
At the end of 2011 Portuguese media reported that both Camargo Corrêa and Votorantim were preparing to buy Cimpor minority shareholders out. It has now been reported that Votorantim is looking to make use of its option to buy bank Caixa Geral de Depositos SA's 9.6% in Cimpor and thus reach a stake in Cimpor similar in size to that owned by Camargo Corrêa.
Shriram EPC to pick up majority stake in plant
22 February 2012India: In a clear move away from its traditional engineering, procurement and construction (EPC) business, Shriram EPC, part of the financial services major Shriram Group, is ready to pick up a majority stake in Sree Jayajothi Cement. The company's board approved picking up a significant equity share capital of Sree Jayajothi by partially converting the dues owned by Sree Jaya Jothi into equity.
Shriram EPC, which provided EPC services to the latter's cement plant at Yanakandala village in Andhra Pradesh, has invested its own money for the project. Shriram EPC hopes to complete the deal by mid-April 2012, according to its managing director and CEO, T Shivaraman.
"For us it is a strategic move," explained Shivaraman. "For the group it is a diversification to get into the cement business. This move will have long term benefits for us. Since Sree Jayajothi could not return the money that we invested over the years, we thought it fit to convert the dues into equity. We are converting part of the dues into equity and it will be for majority stake."
Sree Jayajothi has been struggling to find a suitable investment partner for its cement business, with repayment so far taking longer than expected. Over recent years Shriram EPC has invested over US$100m in the plant.
Aditya Birla Group considers buying Lafarge South Africa
09 January 2012India: Aditya Birla Group is considering buying Lafarge's operations in South Africa to further bolster its presence overseas. The US$35bn conglomerate, which owns India's biggest cement producer Ultratech, is conducting an initial assessment for a possible bid for the Lafarge unit. Lafarge South Africa Holding has a value, comprising both equity and debt, close to US$800-900m according to a report from December 2011. It has a cement capacity of over 3Mt/yr and it operates 20 quarries and 55 ready-mix concrete plants.
The sell-off of its cement operations in the region is part of Lafarge's plans to restructure its global operations through a series of asset sales to retire debt, which currently stands at over US$18bn. Lafarge may also sell off its majority equity holding in Pan African Cement, which has its units in Zambia, Tanzania and Malawi.
A spokeswoman for the Aditya Birla Group declined to comment on the report. The group, one of the world's 10 largest cement producers, operates across 36 countries and has recently considered bids for overseas coal assets. Lafarge has also been unavailable for comment.
Another Indian company Shree Cement is also believed to have shown interest in the asset. "We have initially shown some interest in the project but we would not like to comment on the present status," stated an unnamed senior group official.
Camargo Corrêa denies takeover bid of Cimpor
21 October 2011Brazil: Construction group Camargo Corrêa has denied that it is in talks to buy a remaining stake in Portuguese cement maker Cimpor.
Camargo Corrêa and industrial conglomerate Votorantim have been reported as being in talks to buy the additional stake. According to one source, Camargo Corrêa plans to take over Cimpor's operations in Brazil while Votorantim would consolidate assets of the Lisbon-based company outside of Brazil.
"There isn't any change in the position of this company regarding Cimpor," Camargo Corrêa said in a statement. Camargo Corrêa and Votorantim currently hold 54.1% of Cimpor.
The value of the remaining stake is about Euro1.5bn based on Cimpor's closing share price on 19 October 2011. Votorantim and Camargo Corrêa acquired 53% of Cimpor early in 2010 after beating an offer from steelmaker Companhia Siderúrgica Nacional.
Regulator adds condition to Holcim takeover of VSH
26 June 2011Slovakia: The Antitrust Office has cleared the takeover of Vychodoslovenske Stavebne Hmoty (VSH) by Holcim Slovensko provided that Holcim sells its terminal in Vlkanova in Banska Bystrica County to an independent buyer linked neither to the companies nor to their groups. The watchdog conditioned the transaction in this way because it posed threats to the economic competition on the relevant market specialised in production and sale of grey cement and several local ready-mixed concrete markets.
Holcim, therefore, has proposed to sell the terminal. The regulator maintains that the new owner must be experienced and capable of preserving and developing the existing business and it must be able to expose Holcim to efficient competition after it takes over VSH. The decision on a suitable owner will be made by the watchdog. The terminal supplies cement made in the plant in Rohoznik to customers in the entire county.