Displaying items by tag: Acquisition

India: Orient Cement has cancelled a deal to buy three cement plants from Jaiprakash Associates. The companies signed an agreement in May 2017 to buy a 74% stake in Bhilai Jaypee Cement for US$225m and the acquisition of the Nigrie cement grinding plant in Singrauli, Madhya Pradesh from Jaiprakash Power Ventures for US$77m. Orient Cement said that the terms of the agreement allowed either party to terminate it if it did not complete within 12 months.

Bhilai Jaypee Cement, a joint venture between Jaiprakash Associates and the Steel Authority of India Limited (SAIL), has a 2.2Mt/yr integrated Portland slag cement plant in Satna Madhya, Madhya Pradesh and a grinding plant in Bhilai, Chhattisgarh.

Brazil: Cemex Latam has signed an agreement to sell its stake in Cimento Vencemos do Amazonas to Votorantim Cimentos for US$30m. Cimento Vencemos do Amazonas operates a river cement terminal in Manaus in Amazonas, according to the La Republica newspaper. The deal is subject to approval by the Brazilian and Colombian competition bodies and the Brazilian waterways transportation agency.

UltraTech Cement’s deal to buy the cement business of Century Textiles & Industries could see it become the world’s third largest cement producer by production capacity outside of China.

It announced this week that it had entered into an acquisition agreement to buy the cement subsidiary of BK Birla Group for US$1.26bn. If the deal completes then it will gain three integrated plants in Madhya Pradesh, Chhattisgarh and Maharashtra respectively with a combined production capacity of 11.4Mt/yr and a 1Mt/yr grinding plant in West Bengal. At this point UltraTech Cement will increase its production capacity to 106Mt/yr seeing it become the third largest cement producer in the world in Global Cement’s Top 100 Report.

This latest deal is subject to the usual regulatory approval from competition bodies and the like. Bustling past this step seems far from clear at this stage given that UltraTech Cement owns cement plants already in each of the four states the proposed purchases are in. It has described the purchase as giving it, …”the opportunity for further strengthening its presence in the highly fragmented, competitive and fast growing East and Central markets and extending its footprint in the Western and Southern markets.” Synergy savings from procurement and logistics are expected to follow with further benefits to be gained from the company’s distribution network. Local and national competitors may not see it the same way and the fallout from a price war could be damaging for smaller producers.

As covered previously, UltraTech Cement seems hell bent on winning its on-going fight against Dalmia Bharat to buy Binani Cement. Rightly or wrongly UltraTech Cement tried to muscle its way into buying Binani by making a bid directly to its owners after it lost an auction for it. Legal wrangling has followed as the insolvency process for Binani Cement has clashed against the auction process of the administrator. At the time of writing it is still far from clear which company will win.

Comparing the prices of the two latest acquisition targets by UltraTech Cement may offer some insight of its motivations. The Binani Cement assets roll in at just over US$125/t of production capacity. Although, as noted below, some of this is located outside of India. The Century Textiles & Industries assets are being purchased for a little over US$100/t. This is interesting as it is lower that the Binani cost, although the close links between BK Birla Group and UltraTech Cement’s owner Aditya Birla may help to explain this.

UltraTech Cement’s milestone as it surpasses the 100Mt/yr capacity level will mark a continuing change in the world’s cement industry as it moves away from Europe and North America to developing economies. As ever the classification is a bit of a fudge given that Global Cement’s top producers list excludes Chinese producers. Partly this arises from the difficulty obtaining reliable data on the Chinese industry. Partly this comes from top producer’s list looking at multinational companies over (extremely) large national ones. Due to this UltraTech Cement remains a regional player. Or it will at least until it (or if it) manages to buy Binani Cement. Some of the assets included in that sale include plants in both the UAE and China. At this point UltraTech Cement’s claim to be the third biggest cement producer in the world will be secure.

India: UltraTech Cement has agreed an acquisition schedule to buy the cement assets of Century Textiles & Industries. The cement production subsidiary of BK Birla Group comprises three integrated plants in Madhya Pradesh, Chhattisgarh and Maharashtra respectively with a combined production capacity of 11.4Mt/yr and a 1Mt/yr grinding plant in West Bengal.

The takeover has been arranged via a demerger process whereby Century Textiles’ shareholders will be given shares in UltraTech Cement. The deal is subject to approval from shareholders, creditors, competition bodies and others. It is expected to be completed by early 2019.

France: The Carlyle Group has started talks with HGH Infrared Systems to acquire a majority stake in the specialist provider of infrared technology products. The proposed acquisition will be subject to customary employee consultations and regulatory approvals. The deal is expected to be completed by the end of 2018. No value for the deal has been disclosed.

“This potential partnership with Carlyle is excellent news for our customers. It will also help HGH to move to the next level and to build on our strong international growth trajectory,” said Thierry Campos, chief executive officer of HGH Infrared Systems. He added that Carlyle’s international reach and its experience in aerospace and defence, oil and gas and energy markets would further help to develop the company.

HGH was founded in 1982. It develops and sells optoelectronic and infrared systems and software for surveillance applications, test and measurement and industrial thermography in different end-markets. The company operates two research and development and assembly sites in the Optics Valley near Paris, France and in California, US. The company provides solutions to clients across 40 countries through two recognised brands HGH Infrared Systems and Electro Optical Industries (EOI).

Canada: CSL Group has agreed to buy 50% of Eureka Shipping, SMT Shipping agreement for CSL to acquire 50% of Eureka Shipping, SMT’s pneumatic cement vessel business. The new joint venture will allow Eureka and CSL to expand services to customers in the seaborne cement powder and fly ash transportation markets around the world. CSL’s Australian cement shipping business is not included in the joint venture.

“The joint venture represents an important step in CSL’s strategy to increase its presence in the global construction material sector,” said Louis Martel, President and chief executive officer (CEO) of CSL Group.

The companies say that the partnership is a strong strategic fit, leveraging the companies’ respective strengths in the shipping and handling of dry bulk cargos. There will be no change in the day-to-day management and operation of vessels in the Eureka fleet. The transaction is subject to regulatory approval and is expected to be completed by the end of June 2018.

Eureka Shipping operates a fleet of self-unloading cement carriers in the Baltic Sea, the Atlantic Ocean, the Mediterranean Sea, the Caribbean and Asia. SMT Shipping Group has, over the past 30 years, built a fleet of about 45 vessels through a number of joint venture companies operating in various bulk commodities markets, focusing on geared bulk carriers, floating storage/transhipment terminals and belt-unloaders.

Bosnia & Herzegovina: Austria’s Asamer Baustoffe has made a bid for the remaining share of Fabrika Cementa Lukavac. At present it owns 99% of the cement producer. Fabrika Cementa Lukavac operates 0.8Mt/yr integrated plant at Lukavac.

Brazil: Mineração Belocal, a subsidiary of Belgium’s Lhoist, has purchased L-Imerys, a lime producer that operates a plant at Doresópolis in Minas Gerais. L-Imerys is a subsidiary of France’s Imerys, according to the Diário do Comércio newspaper. The 0.4Mt/yr lime plant was inaugurated in 2013. The sales is depending on approval by the relevant competition bodies. No value for the acquisition has been disclosed.

India: The National Company Law Tribunal (NCLT) has asked the Committee of Creditors (COC) of Binani Cement to consider UltraTech Cement's revised offer. It has also set 24 June 2018 as the completion deadline of the insolvency resolution process, according to the Press Trust of India. The NCLT also asked the COC to reconsider the resolution plan of Rajputana Properties if the subsidiary of Dalmia Bharat Group was willing to raise its offer over UltraTech Cement’s.

A consortium led by Dalmia Bharat won an auction for Binani Cement with a bid of US$974m in early March 2018. UltraTech Cement then made a direct bid to Binani Cement a few weeks later. However, the Supreme Court blocked UltraTech Cement’s offer in mid-April 2018. UltraTech Cement has since made a raised offer to the resolution professional handling the insolvency process of Binani Cement.

India: Shree Cement is to buy Raipur Handling & Infrastructure for US$8.9m. The railway company operates a railway terminal at Hathbandh in Chhattisgarh near to the cement producer's plant at Baloda Bazar. The acquisition is expected help Shree Cement manage its railway logistics better.