Lafarge has just announced that it will receive Brazilian cement assets in exchange for the sale to Votorantim of its 17.28% stake in the Portuguese Cimpor group on February 3, 2010. The terms of payment depended on the outcome of the public takeover bid for Cimpor.
With these assets, Lafarge becomes one of Brazil’s top three cement operators with 7Mta in a buoyant market averaging 5% annual growth. Already active in Brazil with four plants and one grinding station, Lafarge will now be able to establish new positions in the Northeast and Midwest’s fast-growing regional markets. Additionally, it will reinforce its presence around Rio de Janeiro, which has bright prospects in preparation for the World Football Cup in 2014 and the Olympic Games in 2016.
This acquisition, leveraged by Lafarge’s synergies with existing positions and market growth, will have a positive impact on net earnings per share and ROCE as of 2010, and should increase Lafarge’s EBITDA in Brazil by €85m as of 2011 and by more than €100m in 2012.
Through this transaction, Lafarge was able to unwind its minority stake in Cimpor while strengthening its position in Brazil, where Lafarge now has 1200 employees and is active in its four business lines: Cement, Aggregates & Concrete and Gypsum. The Brazilian competition authorities have been notified of the latest phase of the transaction between Lafarge and Votorantim. Meanwhile, the board of Cimpor has rejected the new takeover offer from Brazilian steelmaker CSN worth EUR4.15bn (US$5.63bn), Cimpor said in a statement. CSN recently raised its offer to EUR6.18 per share from EUR5.75 and lowered its terms from at least 50% plus one share of Cimpor to one-third plus one share. This latest offer still undervalues Cimpor, the statement said, adding that the price is lower than the EUR 6.50 per share Brazilian construction firm Camargo Corrêa has paid for stakes in the Portuguese firm.
Camargo Corrêa has agreements to acquire Cimpor shares from construction company Teixeira Duarte and from Spanish firm Bipadosa through subsidiary Atlansider. The deals now take Camargo Corrêa’s total stake in Cimpor to 31%.
Brazilian conglomerate Votorantim has also agreed to acquire a 3.93% share of Cimpor from holding company Cinveste, upping its stake to 30.8%. Votorantim previously announced deals with Lafarge for a 17.3% stake and Portuguese bank Caixa Geral de Depósitos (CGD) for 9.6%.