Holcim, LaFarge pick local units to combine or sell off before merger
MANILA, Philippines — In line with the $40-billion merger plan of global cement giants Holcim and LaFarge, their Philippine units are mapping out which local businesses to combine and which redundant assets to be auctioned off.
In a disclosure to the Philippine Stock Exchange on Monday, LaFarge Republic Inc. (LRI) and Holcim Philippines said the plan would be to exclude the former’s two plants in Norzagaray, Bulacan, and another plant in Iligan owned by its subsidiary Lafarge Iligan Inc., together with their related assets, would be excluded from such a combination.
The assets to be carved out from the combination are among those expected to be considered for divestment once parent firms Holcim Ltd. and Lafarge SA start a rationalization program to complete their merger. About $1 billion worth of such assets are expected to be unloaded to satisfy anti-trust regulations in some countries.
Holcim, the leading cement-maker in the Philippines, said it has obtained board approval to explore, study and consider the combination of the businesses of the company with those of LRI “in order to avail itself of the resulting synergies and opportunities, and in the course of such study, determine optimal structures to implement such combination.”
LRI has obtained a similar approval from its board, further indicating that the assets excluded from the combination would be “considered for divestment.” It added that such divestment would be conditioned upon two things: the agreement on the terms and conditions of the divestment, including the purchase price, with the potential interested third party buyer or buyers, and completion of the combination.
Holcin’s board has authorized the company’s president Eduardo Sahagun to undertake the study of such combination with LRI and the appointment of financial, legal and technical experts as deemed necessary.
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