Holcim Philippines Inc. is finalizing an offer for select cement-making and related businesses of Lafarge Republic Inc., ahead of a $40-billion global merger between their parent companies.
The company is currently conducting technical and financial due diligence, Holcim Philippines president and CEO Eduardo Sahagun Thursday told reporters in a briefing.
The cement-maker is also prepared to borrow money to finance any acquisition, Sahagun added.
Holcim Philippines earlier identified the assets it was keen to take on as Lafarge Iligan Inc., Lafarge Mindanao Inc. and Lafarge Republic Aggregates Inc. The company said it would also consider Star Terminal at Harbour Centre, Manila.
Holcim, which controls a third of the Philippine cement market, will see its market share rise to about 37 percent once it completes the transaction for Lafarge’s Mindanao assets by mid-2015, Sahagun said.
There are other Lafarge plants that Holcim Philippines is not interested in acquiring. These include facilities in Bulacan, Batangas and Rizal, which collectively account for about 22 to 27 percent of the market, Sahagun said.
They are not the best in the combination,” Sahagun said when asked why Lafarge’s other assets were not considered. “If they are the best, then they will be selected.”
In the third quarter of 2014, Holcim Philippines’ sales rose by about 18 percent to P8.1 billion year-on-year, while profit hit P721.9 million, up by 4.4 percent.
The company’s profit in the nine months to September hit P4.04 billion—up almost 8 percent.
Sahagun said both private sector and government spending drove the company’s growth, with sales expected to continue to rise as more public-private partnership deals are rolled out.