San Miguel Unit to Buy 85.7% of LafargeHolcim's Philippine Unit
- Buyer will have to conduct a tender offer to minority holders
By Ditas B Lopez
San Miguel Corp. agreed to acquire an 85.7% stake in Holcim Philippines Inc. in a deal that would help tycoon Ramon Ang expand his cement business just as the southeast Asian country pursues a massive infrastructure upgrade.
The conglomerate, through unit First Stronghold Cement Industries, will buy 5.53 billion common shares of Holcim’s local arm from entities controlled by LafargeHolcim Ltd, San Miguel said in a filing to the Philippine Stock Exchange. Holcim Philippines’ total enterprise value is $2.15 billion.
The acquisition of the nation’s largest cement maker will help San Miguel to scale up capacity as President Rodrigo Duterte’s government has pledged spending $170 billion on infrastructure projects ranging from airports, bridges, highways and rail networks. Ang also owns Eagle Cement Corp.
“It’s a logical move for San Miguel considering its exposure to road and airport projects,” said Astro del Castillo, managing director at First Grade Finance Inc. in Manila. “The company is capitalizing on government’s ‘Build, Build, Build’ infrastructure program.”
Switzerland-based LafargeHolcim said it will use the proceeds from the sale to further improve its debt ratio by about 0.3 times. The agreement with San Miguel is expected to close in the fourth quarter.
Shares of Holcim Philippines rose as much as 11 percent in Manila on Friday, while San Miguel fell as much as 4.5 percent.
The nation’s largest company by sales will conduct a tender offer for Holcim Philippines shares held by minority shareholders who own 14.27% of total capital stock.