Displaying items by tag: LafargeHolcim
Holcim and Lafarge negotiate merger conditions with Cade
20 November 2014Brazil: Holcim and Lafarge are actively negotiating an agreement with Brazil's anti-trust council, Conselho Administrativo de Defesa Econômica (Cade), to gain approval for their merger.
The deal involves divestitures of 31% or 3.6Mt/yr of Lafarge and Holcim's joint cement production capacity in Brazil. The assets could be sold to single company or several bidders. Holcim is still bound to pay Cade a US$197m fine that was imposed due to cartel practices. Lafarge paid US$16.7m to Cade in 2007 to end the investigation into its practices.
Holcim expects to pick buyers for assets in January 2015
18 November 2014Switzerland: Holcim has said that it expects to have selected buyers for the assets that it must divest to push through its merger with Lafarge by the end of January 2015. Holcim's CFO Thomas Aebischer said that the company had received more than 60 non-binding bids by 20 October 2014.
Oyak Group eyes LafargeHolcim assets amid expansion
14 November 2014Turkey: Oyak Group, Turkey's military pension fund, has US$2bn in cash for acquisitions and may spend some of it on assets being divested by Lafarge and Holcim.
Oyak is interested in Holcim and Lafarge businesses in countries including Romania, Serbia and Hungary, according to Celal Caglar, Oyak's head of the cement and automotive unit. Holcim and Lafarge need to sell units to gain regulatory approval for their planned merger to form LafargeHolcim. In Europe, regulators have set a 15 December 2014 deadline to either approve the deal or open a deeper investigation.
"We are interested in bidding as Oyak or together with a European group," said Caglar. Oyak has US$2bn in cash for acquisitions and can leverage it more than five times if needed, he added. "We are closely following the sale process."
On 10 November 2014 Oyak completed the purchase of Turkey's Denizli Çimento from Ireland's CRH and Turkey's Eren Holding AS for between US$400m and US$450m, as part of Oyak's expansion plans. Oyak has a cement production capacity in Turkey of 20.1Mt/yr, or 19% of the country's market share, through its six plants, including Denizli. It has a clinker production capacity of 10.3Mt/yr, or 15% of Turkey's total. Oyak expects Turkey's cement market to grow by 5% in 2015 after an estimated 6% in 2014, helped by projects including highways, a road tunnel under the Bosporus, stadium constructions and new metro lines.
LafargeHolcim to retain Cauldon cement plant
10 November 2014UK: In January 2014, the UK Competition Commission (CC) instructed Lafarge Tarmac to sell one of its two cement plants to enable a new company to compete in the industry. In light of the LafargeHolcim merger, Lafarge plans to sell Lafarge Tarmac and all of its assets in the UK, with the exception of the Cauldon cement plant in Staffordshire, to a new market entrant. Following the merger, the newly-formed LafargeHolcim would retain the Cauldon cement plant.
The Cauldon plant would remain under the management of Lafarge Tarmac until the merger. "There is unlikely to be much change for employees," said a Lafarge Tarmac spokesperson. "Until the LafargeHolcim merger is completed, the plant remains part of Lafarge Tarmac and will be managed as such with no change for employees, customers or suppliers." The decision was made by the company's shareholders.
Lafarge profit falls by 28% to Euro218m in third quarter of 2014
05 November 2014France: Lafarge has reported that its net profit fell by 28% year-on-year to Euro218m in the third quarter of 2014 from Euro304m in the same period in 2013. The France-based building materials company blamed the drop on the war in Iraq and a sluggish construction market in France.
Overall sales revenue fell slightly to Euro3.64bn. Earnings before interest, taxation, depreciation and amortisation fell by 4% to Euro887m from Euro920m. Cement sales volumes fell slightly to 31Mt.
"In a quarter marked by more moderate growth, we continued to progress on implementing our actions to reduce debt, cut costs and promote innovation... We shall meet our 2014 Euro600m cost-cutting and innovation target and confirm our 2015 Euro550m objective," said Lafarge's CEO, Bruno Lafont.
The company noted that volume trends eased in the third quarter with a more challenging comparable in Europe, mostly in France, where the construction sector remains subdued and in Iraq, the ability to transport cement across the country was limited. Meanwhile, in most emerging markets and in the United States, growth continued and the company benefited from the start-up of its new plants in India and Russia.
Looking ahead, Lafarge confirmed its estimate of market growth of between 2% to 5% in 2014 versus 2013. The company added that it has decided to pause its stand-alone divestments pending completion of the planned merger with Holcim.
Holcim reports weak growth in the first nine months of 2014
05 November 2014Switzerland: Holcim has reported increased cement sales volumes, increased net sales and increased operating profits for the first nine months of 2014, although growth was weaker than expected due to the uneven global economic recovery.
Group-wide cement volumes increased by 1.6% year-on-year to 106Mt over the first nine months of 2014, mainly driven by positive volume developments in the US, India and the Philippines, which offset lower volumes in Azerbaijan, Italy and Argentina.
Consolidated net sales were up by 3.4% year-on-year as a result of higher volumes and better pricing in many markets. Consolidated net sales decreased by 4.7% to Euro11.8bn. Negative currency effects, mainly in Asia Pacific and Latin America, were the main contributor, weighing on consolidated net sales by Euro871m. Operating earnings before interest, taxes, depreciation and amortisation (EBITDA) increased by 0.7% year-on-year. Consolidated operating EBITDA was down by 7.1% to Euro2.27bn, mainly due to currency effects. Adjusted for restructuring and merger costs, operating EBITDA was Euro2.34bn. North America and Europe, the two group regions less affected by the significant currency effects, recorded growth in operating EBITDA.
Operating profit reached Euro1.43bn, an increase of 2.8%. Like-for-like and adjusted for merger and restructuring costs, operating profit increased by 7.8% or Euro117m. Net income was down by 9% to Euro96.2m, partly because Holcim has not yet received the final compensation installment of Euro77.9m for the nationalisation of Holcim Venezuela, which was due on 10 September 2014. In addition, the group benefited from the one-time gain from the sale of 25% in Cement Australia in 2013.
For 2014 Holcim expects the global economies to show another year of uneven performance. Construction markets in Europe are expected to have reached the bottom, with slow recovery in sight. At the same time, North American markets are expected to continue to benefit from a further recovery especially in the US. However, Latin America could continue to face uncertainties in Argentina, but should overall show slight growth in 2014. The Asia Pacific region is expected to grow, although at a comparatively slower pace than experienced in recent years. Africa Middle East is expected to gradually improve. Holcim expects cement volumes to increase in all regions in 2014 with the exception of Europe.
"Holcim posted a solid like-for-like performance in the first nine months of 2014, building on the good traction earlier in the year and despite the ongoing challenging market environment," said Bernard Fontana, CEO. "The group increased like-for-like operating profit on the back of the solid financial performance in North America, Europe and Africa Middle East. However, weak emerging market currencies continued to negatively impact consolidated financial performance, in particular in Asia Pacific and Latin America."
Lafarge and Holcim notify EC over merger
28 October 2014Europe: Lafarge and Holcim have formally notified the European Commission (EC) of their proposed merger in order to obtain regulatory approval. With this notification, Holcim and Lafarge have now completed all necessary notifications with regulatory authorities worldwide.
During pre-notification discussions, which Lafarge and Holcim have had with the EC, the list of proposed assets for divestment in Europe has been slightly amended. Compared with the list of assets presented on 7 July 2014, the two companies now propose to retain Lafarge's Mannersdorf plant in Austria and to divest all of Holcim's operations in Slovakia.
In the rest of the world, the proposed list of assets remains the same, with the exception of the Philippines, as announced by the boards of directors of Lafarge Republic Inc. and of Holcim Philippines Inc.
In parallel to the regulatory process, Holcim and Lafarge are in ongoing negotiations with potential buyers of the assets that are proposed for divestment.
Aditya Birla Group bids for LafargeHolcim assets
21 October 2014India: The Aditya Birla Group has submitted bids to purchase global assets being divested from the LafargeHolcim merger. UltraTech and other companies that belong to Birla have put in bids for cement units of Lafarge and Holcim in Brazil and the Philippines at an enterprise value of US$1.4bn. The group had identified Brazil as a major place for expansion three years ago. The Philippines was among the overseas countries where the group started operations several years ago.
Birla is competing with rival cement companies and private equity funds for the units. Germany's HeidelbergCement has teamed up with Votorantim Cimentos of Brazil while Cemex has joined hands with CRH plc. Eurocement is also in the race. Birla's move is part of its overall plan to increase its cement capacity to 70Mt/yr by early 2016 from 63Mt/yr currently.
Over 50% of Birla's revenues come from its overseas operations. According to a consultant involved with the deal, Birla will be unable to bid for LafargeHolcim assets in some of the market, including India, as a purchase will lead to monopoly in those markets.
LafargeHolcim begin asset divestments
17 October 2014India: Holcim and Lafarge have begun an internal process in India to identify the assets that must be divested to adhere to the requirements of India's competition regulator, the Competition Commission of India.
Both companies are running processes to identify the plants and operations that are not linked to their strategic global plans. The process will also look at consolidation of operations and processes, which will lead to strategic alignment of both the companies in India to create a future-ready organisation with uniform processes.
In India, Lafarge, which has around 5Mt/yr cement capacity, is dwarfed by Holcim with a capacity of 47Mt/yr through its subsidiary companies Ambuja Cement and Associated Cement Companies (ACC), cornering roughly 12% of the 350Mt/yr Indian cement market. Aditya Birla Group's UltraTech is India's largest cement maker with a 62Mt/yr capacity.
UltraTech linked to bid for Lafarge assets in Brazil
15 October 2014India/Brazil: UltraTech Cement, India's largest cement producer, intends to bid for assets owned by Lafarge in the south-eastern region of Brazil, according to Indian press. If the bid is successful it will be the company's largest overseas deal to date. The Aditya Birla Group company currently holds small assets in west Asia.
The Brazilian assets on sale include three integrated cement plants and two grinding stations with a total capacity of 3.6Mt/yr, as well as one ready-mix plant. The Lafarge assets are on sale as part of the divestment plant following the announcement of the LafargeHolcim merger.
UltraTech has an installed cement production capacity of 62Mt/yr. It has 12 integrated plants, one clinker plant, 16 grinding units and six bulk terminals with operations across India, United Arab Emirates, Bahrain, Bangladesh and Sri Lanka.