No asset sales in proposed Cimpor buyout

No asset sales in proposed Cimpor buyout
11 April 2012

Jose Barros Franco, chief executive of Intercement, a subsidiary of Brazil's second-largest construction group Camargo Correa does not expect to have to sell any assets if its buyout  of Cimpor goes ahead as planned.

In a written reply to questions from Reuters the bid price of EUR5.5/Cimpor share was "fair", but would not say if the company would consider sweetening the offer.

Portuguese conglomerate Semapa has made a proposal to major shareholders in Cimpor to try to keep it in Portuguese hands by forming a joint holding company. It does not represent a counter-bid.

He denied market talk that Camargo had a pre-agreement with another Brazilian shareholder in Cimpor - the country's largest cement producer Votorantim - to split up Cimpor assets, but did not rule out a deal in the future to jointly manage the company.

Analysts expect Intercement to take over the bulk of Cimpor capital, but say Votorantim is likely to keep its 21.2 percent stake, which would allow it to carve out part of Cimpor's international business later, avoiding problems with Brazil's competition regulator.

"There is no pre-agreement. We believe that our bid is a good opportunity for all shareholders... Still, we can't rule out the possibility of a future agreement to allow for a better management of the company and addressing competition issues in Brazil," Barros Franco wrote.

"For now we do not expect any asset sales... We are at the disposal of the antitrust authorities to provide all the necessary explanations," he said.

Analysts have previously said that Cimpor may have to sell at least one mill to address Brazilian antitrust regulator's concerns. Votorantim would have to sell various plants.

Published under Cement News