Displaying items by tag: Acquisition
UltraTech purchase of Jaiprakash Associates cement plants likely to complete by June 2017
01 March 2016India: UltraTech Cement's US$2.5bn proposed acquisition of Jaiprakash Associates' cement plants is expected to be completed by June 2017, according to UltraTech Cement.
"We have to ink definitive agreements and get permission from the High Courts. This will take time. The firm expects the agreement to be finalised in the next 12 - 15 months. Expect it to consummate by June 2017," said UltraTech Cement Chief Financial Officer Atul Daga.
Daga added that UltraTech is also looking at alternative routes in case proposed amendments to the Mines and Minerals (Development and Regulation) (MMDR) Act do not happen. In February 2016 the government took views from public, states and industry on amending the MMDR Act to include provisions allowing transfer of captive mines granted through procedures other than auction.
The transfer of captive mining leases, granted other than through auction, would allow banks and financial institutions to liquidate assets where a company or its captive mining lease is mortgaged. The move will allow mergers and acquisitions in the Indian domestic market, especially in the cement sector, in which several deals are currently on hold.
UltraTech Cement signed a Memorandum of Understanding to buy Jaiprakash Associates’ cement plants in late February 2016. Altogether, the cement plants have a total cement production capacity of 22.4Mt/yr.
India: UltraTech Cement has signed a Memorandum of Understanding to buy Jaiprakash Associates’ cement plants, which have a total cement production capacity of 22.4Mt/yr. The deal includes both integrated cement plants and cement grinding plants. The plants are situated in Madhya Pradesh, Uttar Pradesh, Himachal Pradesh, Uttarakhand, Andhra Pradesh and Karnataka.
The acquisition also includes a 4Mt/yr cement grinding plant being built in Uttar Pradesh. UltraTech will pay an additional US$68.7m for this plant once it is completed. The deal will increase UltraTech’s total cement production capacity to 90.7Mt/yr from 68.3Mt/yr. The transaction is subject to regulatory approval.
Bid made for Lafarge Halla Cement
12 February 2016South Korea: The South Korean private equity fund Glenwood Private Equity will join with Hong Kong-based private equity fund Baring Private Equity Asia to buy Lafarge Halla Cement from LafargeHolcim for US$455m, according to investment bank sources.
According to investment bank industry sources on 11 February 2016, Glenwood PE, a preferred bidder of Lafarge Halla Cement, has notified LafargeHolcim that it selected Baring Private Equity Asia as a joint takeover partner. The group will decide whether to give a final nod to the acquisition proposal ahead of its shareholders’ meeting scheduled in March 2016.
Glenwood PE will likely establish a strategic partnership with a local cement company after it buys Lafarge Halla Cement. The possible cement companies include Sungshin Cement Co. with a 12.9% market share as of 2014 or Hanil Cement, which had a 13.6% market share in 2014. The combined market share of Lafarge Halla Cement (12.1%) with either of the cement companies would top the 19.8% share held by the current South Korean market leader Ssangyong.
Hengst acquires Nordic Air Filtration
02 February 2016Germany: Hengst has acquired all the shares of the Danish filtration specialist Nordic Air Filtration. The Münster-based filtration manufacturer said that the acquisition was part of its growth strategy.
"Nordic Air Filtration's entire product portfolio is an excellent complement to our current expertise in the field of industrial filtration. Our goal is to expand our activities in the non-automotive market further and to transfer our competence and technology as a partner in the automotive industry to filtration applications in these related segments," said owner Jens Röttgering.
Nordic Air produces industrial air filtration systems and it supplies dealers and original equipment manufactures worldwide. The company has three locations in Denmark and in the UAE and employs around 100 staff who generate sales of over Euro15m/yr. Nordic Air Filtration has a very large portfolio of around 4000 different filter products and more than 20 different filter media for gas turbines and industrial applications. André Radley Grundahl, who was formerly Managing Director of Nordic Air, will continue to oversee business operations.
Sagar Cements and JSW in talks to buy Andhra Cements
20 January 2016India: Sagar Cements is in advanced talks to buy Jaypee Group's Andhra Cements. JSW Cement is another potential contender. The enterprise value of the deal is expected to be around US$162 – 169m, a steep discount of about 30% in comparison with recent cement deals.
Andhra Cements has two plants in Andhra Pradesh with a combined capacity of 2.6Mt/yr. It also has a 25MW captive power plant under construction. It had a debt of US$118m at the end of its 2015 fiscal year. If the deal transpires at US$162m, it will translate into an enterprise value of US$64/t of cement capacity. This is lower than the average valuations of US$100/t of the recent deals in the sector.
"We would like to clarify that, though the company does hold discussions internally now and then in an informal way on expanding its operations through organic and inorganic routes, no particular entity has yet been identified for a possible acquisition," said an Andhra Cements spokesperson.
For Sagar Cements, the deal presents several long-term synergies. The acquisition will enhance its current capacity of 3.8Mt/yr by 2.6Mt/yr. Secondly, Sagar Cements will add the capacity at a time when the creation of two new states, Telangana and Andhra Pradesh, is expected to generate an incremental cement demand of 30Mt in the region in the next five years.
HeidelbergCement issues Euro625m of debt certificates
15 January 2016Germany: HeidelbergCement has successfully issued debt certificates in the amount of Euro625m, further strengthening its financing structure. Due to high demand, it was possible to significantly increase the issue volume from Euro400m to Euro625m.
The newly-issued debt certificates, with a maturity date of 20 January 2022, consist of two tranches; one tranche with a floating rate and the other with a fixed rate. The fixed rate tranche yields at 1.85%/yr and the floating tranche at 1.5%/yr over six months Euribor.
The proceeds will be utilised to pre-fund the upcoming Italcementi acquisition and thereby reduce the volume of the bridge financing from Euro3.3bn to Euro2.7bn. The refinancing needs in the bond market decline to below Euro2bn, correspondingly.
Issuance of the debt certificates was secured with the assistance of Landesbank Baden-Württemberg, Landesbank Hessen-Thüringen and Raiffeisen Bank International.
As previously reported, the bridge financing should be refinanced by free cash flow, the sale of production sites and the issuance of bonds. The reduction in the volume of bridge financing thus also reduces the need for refinancing in the bond market by the same amount.
CRH enters race to buy Lafarge India
12 January 2016India/Ireland: CRH has decided to bid on the 11Mt/yr of cement assets up for sale by Lafarge India, according to local media. This follows CRH's acquisition of US$7bn of assets from Lafarge and Holcim in 2015 that were available as a result of their merger.
CRH is already present in India via its 50% stake in My Home Industries (MHI), which has 4.8Mt/yr of cement production capacity. In 2013, MHI acquired Sree Jayajothi Cements, which has 3.2Mt/yr of production capacity in the south of India.
UltraTech may buy stake in Kenya’s ARM Cement
12 January 2016Kenya/India: UltraTech Cement Ltd may buy a controlling stake in Kenya's ARM Cement Ltd. ARM announced on 23 December 2015 that it was in talks with an unidentified institutional investor about a US$125m investment.
Shanshui Cement takes over 100 factories from Shandong Shanshui
04 January 2016China: Shanshui Cement has announced that as of 31 December 2015, the company took over 100 factories that belonged to Shandong Shanshui, including the Shandong Cement Factory.
At the time, 'the former directors of Shandong Shanshui, namely Zhang Caikui, Zhang Bin and Huang Kehua, still illegally occupied the head office and five factories of Shandong Shanshui and illegally retained important documents, including but not limited to, seals, chops and books,' according to local media. As the company documents were illegally retained, Jinan Administration for Industry & Commerce refused to proceed with the application for the change of directors of Shandong Shanshui.
Limak Cement plans US$1bn African acquisition
18 December 2015Africa: Turkey's Limak Cement is in talks on the acquisition of cement operations in Africa which could be worth up to US$1bn, a senior executive told Reuters, though there was no certainty a deal would be agreed.
Limak, which already has interests in Mozambique and Ivory Coast, has signed a confidentiality agreement regarding the purchase from an international cement company, though the outcome of the talks will not be known for several months. Limak Cement Group General Coordinator Gultekin Aksuyek did not say who it was looking to buy the assets from, but said that it had operations in more than one African country.
"A global cement firm is considering selling its facilities in three African countries. We are seriously interested and have signed a confidentiality agreement," said Aksuyek. "I think we will know in five to six months." He added that Turkish companies had ground to make up in the continent, which has good growth opportunities.
Other overseas expansion plans are also in the works. "We are also studying a possible acquisition in one of the Latin American countries," said Aksuyek. "We may make an acquisition there in the next five years." Limak has 10 cement plants in Turkey and is building cement grinding and packaging facilities in Mozambique and Ivory Coast, which are expected to come online in 2016 and 2017.
Aksuyek expects Limak Cement's sales volume to grow by around 4% in 2016 to 8.8Mt.