San Miguel Corp.
SMC said the purchase of a total of 5,531,566,062 common shares of LafargeHolcim’s Philippine unit will be made by First Stronghold Cement Industries Inc., a wholly-owned subsidiary of San Miguel Equity Investments Inc.
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San Miguel Corp. buys Holcim Philippines in $2.15-B deal
(Philstar.com) - May 10, 2019 - 11:27am

MANILA, Philippines — LafargeHolcim — Europe’s largest cement maker — has signed an agreement selling the operations of its Philippine subsidiary to San Miguel Corp. for a value of $2.15 billion, with the transaction expected to be closed in the fourth quarter of 2019 subject to regulatory approvals.

In a statement dated May 9, LafargeHolcim said it was divesting its entire 85.7% shareholding in Holcim Philippines Inc. — which operates four integrated cement plants and one grinding plant.

Proceeds from the buyout will be used to “further improve” LafargeHolcim’s debt ratio by approximately 0.3 times, the company said.

Both SMC and Holcim Philippines informed the stock exchange about the deal in separate disclosures Friday, with the latter saying “the sellers believe that the transaction is for the best interest of the company.”

SMC said the purchase of a total of 5,531,566,062 common shares of LafargeHolcim’s Philippine unit will be made by First Stronghold Cement Industries Inc., a wholly-owned subsidiary of San Miguel Equity Investments Inc.

The sale of LafargeHolcim’s Philippine business is subject to the approval by the Philippine Competition Commission. In the Philippines, there are eight integrated cement manufacturers: Holcim, Republic Cement, Cemex, Taiheiyo, Northern Cement, Eagle Cement, Goodfound and Mabuhay.

“The acquisition of HPI will increase the foothold of the San Miguel Group in the cement business, and will provide the opportunity to implement its plan to expand its cement business nationwide,” SMC said.

With the divestment of the Switzerland-based cement maker’s activities in the Philippines, LafargeHolcim CEO Jan Jenisch said “we are completing our exit from the increasingly hyper competitive arena in South East Asia.”

LafargeHolcim also recently sold its assets in Indonesia, Malaysia and Singapore.

“While this decision is based on our strategic portfolio review, we have reached very attractive valuations allowing us to achieve a new level of financial strength,” Jenisch said.

“We will have over performed our target ratio of Net Debt to Recurring EBITDA of 2 times or less* by the end of 2019. We have delivered on the promised strengthening of our balance sheet and we are on track to accelerate the execution of our Strategy 2022 – ‘Building for Growth,’” he added. — Ian Nicolas Cigaral

HOLCIM PHILIPPINES SAN MIGUEL CORPORATION
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