Buzzi Unicem set to acquire 50% of Grupo Ricardo Brennand
Buzzi Unicem has signed an agreement with Grupo Ricardo Brennand aimed at acquiring 50 per cent of BCPAR SA, a subsidiary of Brennand Cimentos, including two integrated cement plants in Paraíba and Minas Gerais, Brazil.
The agreement allows Buzzi Unicem to reach a 50 per cent stake in BCPAR SA after acquiring the
totality of the shares held by the current minority shareholders, BNDESPAR and FIP MPlus, besides a part of the shares owned by Brennand Cimentos, as well as the underwriting of dedicated capital increase of the same company BCPAR SA.
Initially Buzzi Unicem will outlay BRL$700m (US$168.8m), of which BRL$350m for the share purchase and BRL$350m for the capital increase, corresponding to approximately EUR150m. The initial phase will be funded through cash and existing credit facilities.
The Minas Gerais cement plant in the municipality of Sete Lagoas started operations in May 2011 and has a capacity of 1.2Mta of cement and 2.4Mta of cement. The Paraíba cement plant in Pitimbu, which was commissioned in August 2015, has a capacity of 1.4 Mta of clinker and 1.7Mta of cement.
The completion of the 100 per cent acquisition, if the options are exercised, will occur no later than 2026. It is deemed that the closing can take place by 31 December 2018, subject to approval of the Brazilian antitrust authority (CADE).
The agreement reached allows Buzzi Unicem to extend its industrial operations to the largest economy in South America and contributes to improve the geographical diversification of its regional presence. Buzzi Unicem believes that the current downturn in the Brazilian economy, and in particular of the local cement industry, can be positively resolved starting from 2019.
Total cement consumption in Brazil reached its peak in 2014 with 71.7Mt, while in 2017 domestic consumption amounted to 53.8Mt. The prevailing expectation is that in 2018 the market performs at a level consistent with 2017. The per capita cement consumption decreased from 350kg in 2015 to 260kg in 2017.
