The local units of cement manufacturers Holcim Ltd. and Lafarge SA (LG) are set to merge as part of the global operational integration that will form what their parent companies expect to be the biggest cement company in the world.
At a special meeting held over the weekend, locally listed Lafarge Republic Inc. (LRI) and Holcim Philippines Inc. agreed to combine their businesses, and in separate disclosures to the Philippine Stock Exchange on Monday, they said their respective boards of directions have approved plans “to explore, study and consider the combination of their businesses.”
“…Such a combination may create synergies and opportunities to further grow the business in the robust Philippine market with benefits to all stakeholders,” Holcim Philippines told the local bourse.
The board of Holcim Philippines authorized its president and chief operating officer, Eduardo Sahagun, to undertake the study of such integration and the appointment of financial, legal and technical experts as he may deem necessary, it said.
Confirming the merger plan, Lafarge in its filing said its plants in Norzagaray, Bulacan, and Iligan may be excluded from the consolidation.
“It is contemplated that the corporation’s Bulacan and Norzagaray cement plants, together with their respective related assets and the corporation’s interests in its subsidiary, Lafarge Iligan Inc., which owns the Iligan plant, be excluded from the combination and considered for divestment,” LRI said.
The plants may be sold to other parties, it said.
“The transactional structure of any resulting combination will depend on the outcome of the review by the parties and their further discussions,” Holcim added.
Bloomberg reported in April that global cement manufacturers Holcim and Lafarge agreed to form the world’s largest cement maker as they prepare to sell assets with 5 billion euros ($6.9 billion) in revenue to win regulatory approval for what may be the biggest European deal this year.