THE ABOITIZ group seeks to enter the cement business by teaming up with UK-listed CRH plc to acquire a majority stake in the Philippine cement operations of Lafarge, a move seen to complement its foray into big-ticket infrastructure-building.
Aboitiz Equity Ventures announced on Friday that it had signed an exclusivity agreement with non-binding memorandum of understanding with CRH for potential participation in the acquisition of the majority of the shares of Lafarge Republic Inc. and the shares in Luzon Continental Land Corporation and Lafarge Cement Services Philippines Inc. These entities constitute majority of Lafarge’s Philippine cement operations.
CRH announced earlier this year its commitment to acquire the Philippine cement operations of LaFarge.
“AEV and CRH are in exclusive negotiations whereby AEV may potentially invest with CRH in the acquisition of four Luzon-based cement manufacturing plants located in Bulacan, Norzagaray, Teresa, and Batangas; a plant in Danao City, Cebu, and associated limestone quarries,” AEV president and chief executive officer Erramon Aboitiz said in a press statement.
“We are very pleased with the prospect of entering this new business, which is a solid opportunity that will support our thrust to develop infrastructure as one of our core businesses and create a more diversified income source for AEV. Together with CRH, we aim to take an already successful Philippine cement operations and management team to greater heights, as the country’s need for quality cement will continue to grow in line with its resurgent economy and infrastructure sector,” Aboitiz said.
CRH is a global leader in the manufacture and supply of a diverse range of building materials and products for the modern built environment. With operations in 34 countries worldwide, CRH is the largest building materials company in North America, a regional leader in Europe and has strategic positions in Asia. Its shares are listed on the London and Dublin stock exchanges as well as on the New York Stock Exchange in the form of American depository shares.
For its part, AEV is getting into infrastructure as the fifth leg of its core businesses after power, banking, food and property development.
“Venturing into infrastructure meets our growth criteria. We are very optimistic of the potential gains this new core business will bring to the Group amid the huge demand for infrastructure in the Philippines,” Aboitiz noted.
Conclusion of any transaction will be subject to the successful completion of the global merger between Lafarge S.A. and Holcim Ltd and also approval by the boards of both CRH and AEV.