Lafarge agreed on Friday to swap a stake in Portuguese rival Cimpor for plants in Brazil, a move that will help it become the third-largest producer of the material in the South American nation.
Lafarge gave up its 17.3 per cent stake in Cimpor in exchange for the three facilities, which were owned by Votorantim Cimentos, it said in a statement. Cimpor was the target of a takeover battle between Votorantim and Brazilian rivals Camargo Correa and CSN.
In addition to the plants, Votorantim agreed to supply scrap and clinker to Lafarge, which should help boost output by about 700,000tpa, the statement said. The company will invest BRL60m ($34m) to boost capacity at five of its existing units, it said.
With the asset swap, Lafarge will become one of Brazil’s three biggest cement producers with more than 7Mt of capacity.
Both Votorantim and Camargo Correa thwarted CSN’s plans to expand into cement by acquiring 61 percent of Cimpor through private agreements with shareholders including Lafarge.
The defensive move, which will allow Votorantim and Camargo to remain Brazil’s largest and fourth-largest cement makers, respectively, is likely to face tough regulatory scrutiny from antitrust authorities in Brazil.
The swap helps Votorantim increase its stake in Cimpor to about 21 percent. The company has a long-term accord with Portuguese state bank Caixa Geral de Depositos to acquire a further 9.6 percent in Cimpor.
The swap will take effect in July, when Lafarge will take full control of the Cipasa, Aratu and Cocalzinho plants, the statement added.
On Feb. 19, the antitrust unit of Brazil’s Justice Ministry asked the country’s competition regulator, Cade, to forbid Cimpor’s Brazilian unit from swapping assets with Votorantim and Camargo Correa