Aboitiz, British firm raise stake in Lafarge to 99.09%
The consortium of Aboitiz Equity Ventures (AEV) and British firm CRH Holdings has gained 99.09 percent of local cement firm Lafarge Republic Inc. (LRI) following the mandatory tender offer to minority shareholders.
The tender offer gave minority shareholders of LRI the chance to exit or sell their shares following the P59.1-billion takeover deal.
AEV disclosed to the Philippine Stock Exchange on Monday that the joint venture firm AEV CRH Holdings Inc. had accepted from the public a total of 596.49 million shares.
This represents 10.24 percent of the outstanding shares of LRI following the conclusion of the mandatory tender offer period on Sept. 9.
Prior to the tender offer, 88.85 percent of LRI had been committed for sale by the principal shareholders.
The divestment was in turn a consequence of the global merger of global cement giants Lafarge and Holcim.
The LRI shares were sold by shareholders to the group at P10.26 a share, giving LRI an enterprise value of P59.7 billion.
The only assets carved out of the deal were Lafarge Republic Aggregates Inc. (LRAI) and Star terminal at the Harbour Centre Manila, both of which will be absorbed by Holcim Philippines Inc. and its affiliate, Holcim Mining Development Corp.
After it acquires control of LRI, the group intends to apply for voluntarily delisting of LRI shares from the PSE.
The local bourse requires a public float of at least 10 percent to remain listed on the local stock exchange.
As to how the AEV-CRH partnership was structured, Román Azanza III, AEV first vice president for business development, said in a recent interview with the Inquirer that two holding companies would be created to hold the land, quarry, manufacturing, sales, corporate offices and some assets of LRI.
“We basically have majority of the holding company that owns the land, quarry and mining and all nationally restricted assets,” Azanza said, referring to the Constitutional restriction on the foreign ownership of certain industries like real estate.
All the other assets—the manufacturing and sales/marketing vehicles—will be folded into another holding firm where CRH will in turn have majority control.
“Basically, in the aggregate, we are able to utilize their cement technology to the fullest and that’s why we’re partnering. We’re relying on their management skills and technology,” Azanza said.
AEV has committed to invest up to P24 billion in this cement venture with CRH, a global leader in the manufacture and supply of a diverse range of building materials and products.
With operations in 34 countries, 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.
“It’s really the board oversight from both sides that will crystallize value from this investment,” Azanza said.
“Within the month, we plan to close the transaction and begin the whole adventure in building material space,” he added.
