ZURICH (Reuters) - LafargeHolcim (S:LHN) is selling its Indonesian business to Semen Indonesia (JK:SMGR) as it reviews its portfolio to improve its financial strength, the world's largest cement maker said in a statement on Monday.
LafargeHolcim signed an agreement with state-owned Semen Indonesia to divest its 80.6 percent in Holcim Indonesia for an enterprise value of $1.75 billion (1.36 billion pounds) on a 100 percent basis, the company said.
The assets sold, which represent LafargeHolcim's entire operations in Indonesia, consist of four cement plants, 33 ready-mix plants and two aggregate quarries, the Swiss company said.
"As part of our Strategy 2022 – 'Building for Growth' we have committed to divestments of at least 2 billion Swiss francs. Today's announcement is an important milestone in reaching our target and to increase our financial strength," Chief Executive Jan Jenisch said in the statement.
"The proceeds from this transaction will significantly improve our debt ratios with the target of two times net debt to recurring EBITDA to be achieved by the end of 2019," he said.
LafargeHolcim had laid out a new strategy in March and said it wanted to raise around 2 billion Swiss francs from selling assets and could leave two or three countries in order to concentrate on the United States, Latin America, India and Africa.
LafargeHolcim and peer HeidelbergCement (DE:HEIG) recently cut their profit guidance for the full year after being caught off guard by rising energy costs.