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Jakarta Post

Semen Indonesia buys LafargeHolcim arm in $1.75 billion deal

Semen Indonesia buys LafargeHolcim arm in $1.75 billion deal Publicly listed state-cement producer PT Semen Indonesia (SI) president director Hendi Prio Santoso (standing, third from left) with SI president commissioner Sutiyoso (sitting, second from left) pose during a photo session after attending an annual shareholders meeting at the Indonesia Stock Exchange (IDX) building in Jakarta in an April 30, 2018 file photo. (JP/Stefanno Reinard Sulaiman)
Fathiya Dahrul, Manuel Baigorri and Joyce Koh
Jakarta   ●   Tue, November 13, 2018 2018-11-13 16:06 912 882ab4bc56dbda08a069b30877bf91ad 2 Business semen-indonesia,cement-factory,Holcim,deal Free

PT Semen Indonesia, the country’s top cement maker, is acquiring LafargeHolcim Ltd.’s local business in a deal valuing the unit at about $1.75 billion including debt.

LafargeHolcim agreed to sell its entire holding in PT Holcim Indonesia as part of a continuing review of its portfolio, according to a statement Monday. Semen Indonesia will conduct a tender offer for remaining shares of Jakarta-listed Holcim Indonesia after completing its purchase of LafargeHolcim’s 80.6 percent stake, it said in a separate exchange filing.

Bloomberg News reported earlier the parties were nearing a deal. The unit holds all the Swiss company’s operations in Indonesia: four cement plants, 33 ready-mix plants and two aggregate quarries, according to LafargeHolcim’s statement.

The transaction helps Semen Indonesia expand its market leadership while allowing LafargeHolcim to reduce group debt and exit a market where it’s struggled. Semen Indonesia edged out Malaysian tycoon Francis Yeoh’s YTL Corp. and Chinese cement producer Hongshi Holding Group Co. in the final round of talks, people with knowledge of the matter said.

Representatives for YTL and Hongshi didn’t immediately respond to requests for comment. A representative for LafargeHolcim declined to comment.

Shares of Holcim Indonesia jumped as much as 10.2 percent in Tuesday trading. They were up 4.7 percent to 1,995 rupiah at 3:24 p.m. in Jakarta, headed for the highest close since January 2015. The benchmark Jakarta Composite Index rose 0.9 percent.

LafargeHolcim Chief Executive Officer Jan Jenisch said in the statement Monday that the company has committed to divestments of at least 2 billion Swiss francs ($2 billion). That’s part of a five-year turnaround plan announced in March to increase sales and cash flow.

BNP Paribas SA advised Semen Indonesia on the deal, while LafargeHolcim worked with Citigroup Inc.