Black Friday is Now! Don’t miss out on up to 60% OFF InvestingProCLAIM SALE

Two industry groups eye Lafarge-Holcim assets - sources

Published 07/10/2014, 19:24
Updated 07/10/2014, 19:30
© Reuters A logo is seen at a Lafarge concrete production plant in Pantin
HOLN
-
LAFP
-
HEIG
-
CRH
-
TEM
-
CX
-
BX
-
SAHOL
-

By Anjuli Davies, Soyoung Kim and Arno Schuetze

LONDON/NEW YORK/FRANKFURT (Reuters) - Irish cement maker CRH (I:CRH) has teamed up with Mexican rival Cemex (MX:CMXCPO) to explore a bid for all the assets industry giants Lafarge (PA:LAFP) and Holcim (VX:HOLN) must sell to get the go-ahead for their planned merger from competition watchdogs, according to several people familiar with the matter.

Germany's HeidelbergCement (DE:HEIG) and Brazilian firm Votorantim Cimentos SA are also considering a joint bid for the entire portfolio, the sources said.

These would compete with several private equity groupings that have been formed to pursue a deal for the assets, which could be valued at anywhere between 4 billion and 7 billion euros (3.11 - 5.50 billion pounds), they said.

Teaming up would allow companies to carve up the assets according to their geographic fits and would also help split the cost.

A spokesman for Cemex said it does not comment on market rumours, while HeidelbergCement and CRH declined to comment. No one at Votorantim Cimientos was immediately available for comment.

A spokeswoman for Lafarge declined to comment beyond saying the companies are on track to close the merger in the first half of next year. Holcim declined to comment.

Lafarge and Holcim unveiled plans in April to create the world's biggest cement group with $44 billion in yearly sales.

But competition regulators in some 15 countries, as well as the European Commission, are expected to take a hard look at the deal which brings together the world's top two cement makers with a combined stock market value of more than $55 billion.

The pair are seeking buyers for Holcim's French activities, Lafarge's German interests and other operations in Austria, Hungary, Romania, Serbia, Britain, Canada, the Philippines, Mauritius and Brazil. That would affect some 10,000 workers and account for about 3.5 billion euros ($4.4 billion) of sales.

Holcim said last month the two companies were seconding one senior manager each to a divestment committee to advance plans for the disposals, which could involve setting up a new business as well as outright sales.

In the event of any spin-off, the two managers would be the chief executive and chief financial officer of the company, Holcim said, in a move that could facilitate a sale to private equity firms.

Turkish conglomerate Sabanci Holding (IS:SAHOL) plans to bid for some of the assets, while other strategic bidders could also team up to bid for the assets.

At least four consortia of private equity firms are also eyeing the entire portfolio, sources familiar with the matter said.

BC Partners, Advent and Temasek (UL:TEM) have teamed up, as have CVC and sovereign wealth funds the Abu Dhabi Investment Authority (ADIA) and Singapore's GIC. Bain and Onex form the third group and Blackstone (N:BX), Cinven and Canadian pension fund CPP are the fourth.

Blackstone, CVC, BC Partners, Advent, Cinven, Bain, CPP and ADIA all declined to comment. The other firms could not immediately be reached for comment.

© Reuters. A logo is seen at a Lafarge concrete production plant in Pantin

(1 US dollar = 0.7910 euros)

(Additional reporting by Freya Berry in London, Natalie Huet in Paris, Padraic Halpin in Dublin and Elinor Comley in Mexico City; Writing by Caroline Copley; Editing by Greg Mahlich)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.