Displaying items by tag: Votorantim Cimentos

Portugal: 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.

Brazil: 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.

Portugal: 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.

Camargo 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?

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.

Brazil: 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.

Brazil: Votorantim Industrial, Brazil's largest diversified industrial conglomerate, intends to use proceeds from the sale of its stake in steelmaker Usiminas to expand its cement and mining output.

Chief executive, Raul Calfat, announced that the US$1.34bn raised by Techint's purchase of Votorantim's 13.5% voting stake in Usiminas had boosted the group's cash holdings to US$6.5bn. This high level of cash will allow the investment holding company to avoid borrowing at a time when financial markets remain shut for all but the most credit-worthy companies, said Calfat. It also gives the company room for funding heavy investment plans with its own cash.

Calfat said that the group's cement unit, Brazil's largest producer of the building material, would get one-third of the Usiminas stake sale proceeds. He said that the money would go towards the construction of four factories by 2013.

Brazil: 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.

Brazil: Domestic demand for cement in Brazil is leading to an increase of imports. Imports of cement and clinker reached 2.2Mt from January to September 2011, an increase of 74% from the same period in 2010. The total value of imported cement cost USD135m from January to September 2011, compared with USD80m from the same period in 2010.

From 2007 to 2010 Brazilian per capita consumption rose from 224kg to 310kg while production rose from 40Mt/yr to 59Mt/yr. The country has 70 plants to meet this growing demand. Exports have fallen from 515,000t/yr in 2008 to 36,000t/yr in 2010.

Votorantim Cimentos leads the market with 40 plants and a production of 21Mt/yr. It currently plans to build eight plants by 2014 with investments of USD1.4bn, a sum that includes concrete units as well. CSN Cimentos is an emerging player in the market and it is planning to meet a production level of 8.4Mt/yr by 2013. Camargo Correa Cimentos runs 5.2Mt/yr and Joao Santos 5.9Mt/yr.