Fight on for control of Holcim SA

Fight on for control of Holcim SA
27 November 2006

Holcim is poised to go it alone with a black economic empowerment (BEE) partner in a R6.82bn transaction that is intended to result in Holcim South Africa getting a black controlling shareholder.

However, Aveng, which has a 46 per cent stake in Holcim SA, appears to be preparing to exercise its pre-emptive rights and acquire 100 per cent of the cement company.

Apparently the JSE-listed Aveng, South Africa’s largest construction and engineering company, was initially asked to waive its rights to acquire the shareholding Holcim intends to sell to empowerment group AfriSam Consortium (ASC), which is headed by Eltie Links, the former trade negotiator and South African ambassador to the EU.

However, Carl Grim, Aveng’s chief executive, on Friday denied that Aveng had taken a decision to waive its pre-emptive rights and take up the offer to acquire a shareholding in ASC.

Grim said the company would inform the market of any decision related to the transaction as soon as it was taken.

Grim said it would be “absolutely no problem at all” for Aveng to raise the R6.8bn funding to exercise its pre-emptive rights and obtain shareholder approval within 30 days of a valid offer being tabled.

However, at the weekend Links said this condition was there as a “courtesy” to Aveng.

“We understand that Aveng have since made clear that they do not intend to waive their pre-emption rights and so, from ASC’s perspective, we are quite happy to waive this condition precedent and simply proceed.

“We see this deal as being in the best interests of Holcim SA, this industry and the country. I made clear to Aveng when we last met that we intended to see this transaction completed as anticipated, with or without their support.”

Links said Aveng’s management was not the type of partner ASC could have a long relationship with “given clearly differing perspectives on the fundamentals of black economic empowerment”.

Lawyers close to the transaction have confirmed the Aveng condition can be waived by Holcim and ASC together.

Mofasi Lekota, the chief executive of ASC, said the group understood that Aveng also did not intend to stay in the business if the consortium took control of Holcim SA.

President Thabo Mbeki last week discussed the transaction with a delegation including Tom Clough, a member of the executive committee of Holcim; Edward Chadwick of Fenix Partner, the transaction advisers to Holcim; and Links and Lekota.

This led to Mbeki devoting his weekly ANC newsletter to the proposed deal and black empowerment.
Published under Cement News