Publicly listed Concrete Aggregates Corp. is selling its basalt quarry operations in Angono, Rizal to Lafarge Holdings (Phils.), Inc., owner of Republic Cement Corp. and Lafarge Philippines.
In a statement, the Lafarge said the transaction will reinforce its entry into the aggregates business, building on cement markets being served by Republic Cement - Metro Manila, Central Luzon, and Southern Tagalog.
Concrete Aggregates had conducted a bidding for the 15-year contract to operate its basalt quarry in Rizal to take advantage of increased materials demand amid a growing construction industry being fueled by a property boom.
The consortium of Republic Cement and Lafarge won the operations contract for P670 million.
Concrete Aggregates, while maintaining ownership of the quarry property, will be forming a new company to hold quarry assets.
Lafarge’s acquisition of the aggregates business will be through shares of the new company, Concrete Aggregates told the stock exchange.
The deal is still subject to various approvals, such as from the Environment department with regard to the operating agreement between Concrete Aggregates and the new company.
In addition, the new company will pay Concrete Aggregates royalty fees during the term of the operating agreement after receiving the right to explore, develop and operate the basalt quarry for a period of 15 years.
Lafarge Holdings (Phils.), Inc. is a subsidiary of Financiere Lafarge S.A.S., a member of the multinational Lafarge cement group.
It is a significant shareholder in Republic Cement, which is one of the country’s largest cement companies with total assets valued at P26.6 billion.
Concrete Aggregates is an affiliate of real estate firm Ortigas & Co. Ltd. Partnership. It began commercial operations in 1959.
Concrete Aggregates is exploring "synergistic opportunities" with its mother company by using raw land as a source of construction materials while simultaneously developing it for future use.