Holcim and Cemex have reached an agreement to conduct a series of transactions to exchange and combine assets in parts of Europe with the aim of improving synergies and boosting operating profit.
Cemex increase its presence in Central Europe through the acquisition of Holcim Cesko in the Czech Republic. The deal includes one cement plant (cement and clinker capacities of 1.1Mta and 0.9Mta, respectively), four aggregate quarries and 17 ready-mix plants. Holcim said it will continue to serve the Czech market from its Rohoznik plant in Slovakia.
In Germany, Holcim will purchase Cemex’s operations in the west part of the country, in particular North Rhine-Westphalia. The transaction includes one cement plant and two grinding stations (total cement capacity 2.5Mta), one slag facility, 22 aggregate locations and 79 ready-mix plants. These will be combined with Holcim’s existing northern German operations. Cemex still retains an important presence in the country with operations in the east, north and south.
Meanwhile, in Spain, Cemex and Holcim will combine all their cement, ready-mix and aggregates operations, allowing the two group’s to benefit from synergies in this troubled European market. Cemex will have a 75 per cent controlling interest over the combined operational assets in the country. Holcim will remain a shareholder for at least five years, the company said.
As part of the interlinked transactions, Holcim will pay Cemex EUR70m in cash.
“This transaction will significantly strengthen our presence in Germany while at the same time giving us the necessary flexibility in Spain,” says Holcim CEO, Bernard Fontana.
Lorenzo Zambrano, CEO and chairman of Cemex, commented: “When finalised, this will be an important strategic step that should allow Cemex to improve its footprint in Europe, and it will consolidate our portfolio in the continent.
Cemex expects the transaction to generate synergies that will result in a recurring improvement in EBITDA of about US$20m-30m, beginning to be realised in 2014. Holcim also said it expects “sustainable additional operating EBITDA of at least EUR20m,” according to a statement by the Swiss major.
Closing of the transaction is envisaged in the fourth quarter of 2013, subjec to due diligence and the necessary approvals by authorities.
