Camargo seeks cement business merger with Cimpor

Camargo seeks cement business merger with Cimpor
Published: 13 January 2010

Brazilian conglomerate Camargo Correa on Wednesday offered to merge its cement business with Cimpor, which is the target of a takeover bid by another Brazilian company, steelmaker CSN.

The deal would depend on Camargo buying 15 per cent to 25 per cent of Cimpor.

Cimpor said in a statement that the proposed deal would leave Camargo with less than 50 per cent of Cimpor’s voting capital.

"Cimpor’s administration will carefully consider the proposal ... and will announce its opinion about the terms and conditions of the proposed merger, which will depend on the approval of Cimpor shareholders," Cimpor said.

Through the integration, Cimpor would pay an extraordinary dividend of up to EUR350m (US$509.2m) to its current shareholders, to be financed by a capital injection to be carried out by Camargo.

Camargo’s proposal comes after Cimpor’s board of directors rejected CSN’s bid last week, saying the takeover attempt, which valued it at about EUR3.86 billion, was hostile and significantly undervalued the Portuguese company.

The new proposal was made during talks between Camargo executives and Cimpor in Lisbon on Wednesday.

The second offer for Cimpor by a Brazilian company shows the growing clout of Brazil’s economy and the strong interest in the construction business as Brazil prepares to host both the Olympics and the World Cup in the next six years.