Lafarge to divest of stake in Molins

Lafarge to divest of stake in Molins
Published: 23 December 2003

As part of its continued efforts to improve its balance sheet following the acquisition of Blue Circle Industries, Lafarge has signed an agreement to sell its 40.9% in Cementos Molins Industrial.  The Lafarge holding goes back to 1997, when it acquired a 39.1% in the Spanish cement producer from Ciments Français.  Ciments Français at that time decided to sell its interest in Cementos Molins as the controlling family was unwilling to cede control.  Under the deal signed between Lafarge and Molins, Cementos Molins Industrial will make a limited offer to buy its own shares, subject to approval from the Spanish authorities, and Lafarge should receive some €270m for its stake.  This is likely to take place some time during the spring of 2004.  However, Lafarge has insisted on taking over Cementos Molins Industrial’s 2.64% stake in the Portuguese cement producer Cimpor, where the Paris-based group wishes to maintain considerable influence.  That purchase is likely to cost Lafarge around €70m.  Having sold its Andalusian cement business to Cimpor almost exactly a year ago, this deal with Molins represents the second major divestment in Spain at a time when the construction market continues to enjoy booming conditions.

Cementos Molins Industrial owns a 1.64m tonnes integrated cement works near Barcelona and Catalonian downstream operations consisting of 30 ready-mixed concrete batching plants with an annual output in excess of 1m m³ and seven gravel pits producing some 3m tonnes per annum as well as a mortars business.  In addition there is a concrete products operation spread more widely across Spain and cement-based interests in Latin America.  These consist of a 50% stake in the Mexican Corporacion Monctzuma, where Buzzi Unicem holds the other half of the equity, and an Argentinean subsidiary, Cementos Avellaneda that in turns has a controlling stake the small Uruguayan cement producer Compania Uruguayana de Cemento Portland.