Holcim’s plans with planned acquisitions

Holcim’s plans with planned acquisitions
Published: 25 January 2005

The planned Indian joint venture with Gujarat Ambuja Cement will not only give Holcim a strong position on the Indian market, but also considerable increase the influence of the third largest Indian cement producer.  But even if taken together the combined interests of Gujarat Ambuja Cement and Holcim would rank behind Grasim-Ultratech, albeit not by much.  However, to conclude the proposed deal, has two regulatory hurdles the clear in India, in respect of which negotiations have yet to start as well a securing sufficient acceptances for its offer for The Associated Cement Companies Ltd.  If Holcim is successful in taking a controlling interest in The Associated Cement Companies, it will focus the business more on cement by disposing of the refractory and fibre-cement operations as well as of a number of property investments unrelated to the cement activities.

As far as Aggregate Industries is concerned, not divestments are envisaged on either side of the Atlantic. The aggregates and concrete operations in the United States are likely to be extended into some areas where Holcim sells cement and Aggregate Industries is not presently active. Using the expertise of the present Aggregate Industries management, Holcim hopes to enhance the return of its existing aggregates activities, 70 per cent of which is concentrated in just seven companies.  Given the favourable cement supply contracts negotiated by Aggregate Industries for its British import business, Paragon Materials, there is no present incentive to switch supplies to sources within the Holcim group.  In the United States, on the other hand, the portion supplied by Holcim is set to increase from the 35 per cent to 40 per cent level seen last year.