Update at 23:02: Deal closed. The companies signed a purchase and sale agreement, Pipeline found.
CSN is in the final details of negotiations for the purchase of the assets of the Holcim (formerly Lafarge Holcim) cement company in Brazil, sources told Pipeline. Benjamin Steinbruch’s company gained an advantage in the negotiation by bidding for the asset package, while other bidders wanted separate factories. The sales process is coordinated by Itaú BBA.
Contract settlements may come into the night, but the deal is expected to be announced as early as Friday, the sources said.
Votorantim Cimentos and InterCement made bids for some assets, while CSN Cimentos and Mizu targeted most or all of Holcim’s 10 industrial plants in Brazil. Some financial advisers who were with companies in the running were informed earlier this evening that the deal is now with CSN.
The acquisition will bring CSN closer to the top of the ranking of cement companies in the country. Holcim is the third largest, behind Votorantim and InterCement. With the acquisition, CSN is going to the top 3. The market assessment was that Holcim’s assets were worth around US$700 million, but the company was looking for more than US$1 billion for the complete package.
It will be CSN Cimentos’ second acquisition in less than four months. At the end of June, it acquired the Elizabeth cement plant for more than R$ 1 billion from the Farallon fund, bringing it to a total capacity of 6 million tons per year. At the time, analysts assessed that the acquisition was at a very reasonable price, considering the average multiples of the sector and the amount of capital that would be needed to aggregate the same production organically.
Holcim’s 10 industrial units have an annual production capacity of 10 million tons of cement.
— Photo: Reproduction