Thailand’s Siam City Cement Public Company Limited (SCCC) won the tender for LafargeHolcim Vietnam entity, a first step in its ambition to deepen its presence in Vietnam.
According to multinational cement-maker LafargeHolcim Group, it has just reached an agreement with SCCC over its Vietnamese unit, after it launched a mandatory tender for its remaining shares in Holcim Vietnam. The group holds a 65 per cent stake in the subsidiary, with the rest in the hands of Vietnam’s largest cement maker Vicem.
LafargeHolcim Group cited that Holcim Vietnam is valued at 867 million of franc (on a 100 per cent basis) or $890.33 million. The tender has also attracted other contenders, including Japan’s Taiheiyo Cement Corporation and Vicem.
Industry insiders said that the tender results were not surprising, as SCCC has strong financial resources and the deal fits perfectly in its short-term plans to acquire a cement plant in Vietnam.
LafargeHolcim Group said in its press release that closing the transaction in Vietnam was subject to customary regulatory and shareholder approval, as well as to a right of first refusal exerciseable by LafargeHolcim’s joint venture partner. The deal is expected to be finalised in the fourth quarter of 2016.
Chairman of Vicem’s board of directors Luong Quang Khai commented that Vicem had at least 60 days after the agreement was struck by LafargeHolcim and SCCC to overrule it and buy up the shares itself.
In Vietnam, LafargeHolcim has five cement plants and eight ready mix concrete plants, with an annual capacity of six million tonnes of cement and one million cubic metres of concrete per year, overtaking Nghi Son Cement Corporation and Phuc Son Cement Company as the largest foreign-invested cement producing company in Vietnam.
Regarding SCCC, established in 1969, it has already established operations in Indonesia, Cambodia and Bangladesh and Sri Lanka as well as two core shareholders in Thailand namely Ratanarak and Jardine Groups.