Camargo Correa bids for Cimpor

Camargo Correa bids for Cimpor
Published: 02 April 2012


Camargo Correa has announced a €2480m bid for Cimpor at €5.50 per share, a 10% premium on the pre-offer share price. InterCement Austria, a wholly-owned subsidiary of Camargo Correa is being used as the bid vehicle. Camargo Correa is currently the sixth-largest cement producer in Brazil, and market leader in Argentina, while Cimpor is the number four in Brazil. Together, the two companies would form the second largest in Brazil, but would still be less than a third of the size of market leader Votorantim.

Camargo Correa is currently claims to hold a 33.25% stake in Cimpor and it its largest shareholder, ahead of Votorantim with a current 21.2% interest, but has an option to increase this to 30.8%. If Votorantim does not exercise its pre-emption right, the Portuguese bank Caixa Geral de Depositos has stated that it will sell out to Camargo Correa.

Because of its dominant market share, Votorantim is unlikely to be allowed to buy Cimpor's Brazilian interests, but it may well insist on acquiring some of Cimpor's operations in other countries as its price for accepting the Camargo Correa bid.  

If the proposed deal goes through, Votorantim would still be more than three times the size of the combined Camargo Correa and Cimpor Brasil in the domestic market. Cimpor has a present global cement capacity of 36.5Mt and last year sold 27.5Mt of cement and clinker in the dozen countries where it trades, a decline of 2.7%. Only in Portugal (7Mt) does Cimpor have a greater manufacturing capacity than it has in Brazil (6.6Mt), but the amount of cement sold was notably greater in Brazil. 

Brazilian cement sales amounted to 5.63Mt last year, compared with 3.7Mt in Portugal.