San Miguel confirms $2.15B buyout of Holcim Philippines

Conglomerate San Miguel Corp. on Friday confirmed its purchase of leading cement maker Holcim Philippines Inc. for $2.15 billion.

In a disclosure to the Philippine Stock Exchange, San Miguel said it entered into a definitive agreements through its wholly-owned subsidiary, First Stronghold Cement Industries Inc., with companies controlled by LarageHolcim Ltd. for the purchase 5,531,566,062 common shares or 85.7 percent equity interest in Holcim Philippines Inc. - a publicly listed company.

"The acquisition of Holcim Philippines 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," the company said.

Holcim Philippines is mainly engaged in the manufacture, sale and distribution of cement and cementitious products and aggregates and the provision of technical support on various construction-related quality control, optimization, solutions development and skills upgrade.

In a separate regulatory filing, Holcim Philippines said the sale and purchase agreement was executed by Holderfin B.V., First Stronghold Cement Industries Inc., San Miguel, and LafargeHolcim Ltd.

Holderfin B.V. shall sell its shares in Holcim Philippines and shall procure Cemco Holdings Inc. and Union Cement Holdings Corp. to likewise sell their shares to First Stronghold Cement Industries Inc.

"As a result of the transaction, the Purchaser (San Miguel) is required to conduct a tender offer of the shares of HPI held by its minority shareholders who hold 14.27 percent of the total issued and outstanding capital stock of Holcim Philippines," according to San Miguel.

The closing of the transaction is subject to the approval by the Philippine Competition Commission (PCC), it said.

For its part, Holcim Philippines said the sellers believe that the transaction is for the best interest of the company.

The $2.15-billion consideration shall be paid in cash on closing of the transaction, subject to a post-closing purchase price adjustment, according to San Miguel. — RSJ, GMA News