Holcim-Lafarge receive bids for global package from Blackstone and CVC led consortia
Only two private equity consortia submitted final bids on 12 January for the global package of assets being sold by Holcim [VTX:HOLN] and Lafarge [EPA:LG] to secure competition clearance for their merger, two sources close to the situation said.
Blackstone, Cinven and Canada Pension Plan (CPP) submitted a bid for the entire package, as did the consortium comprising CVC and sovereign wealth funds ADIA and GIC, the sources said.
A further six bids were submitted for separate parts of the business around the world, the first source said. But the sellers are leaning towards a single buyer, even if it means selling at a discount, both sources said.
The global package is seen fetching around EUR 6bn, the first and a third source said.
The winning bidder is expected to be chosen and its details submitted to the European Commission (EC) for review by the end of this month, the sources said. The second source added that it could take less time – around ten days – to choose the winning bidder.
The parties will consider a range of factors alongside the price when selecting a buyer, including the certainty of the buyer and its financing, according to people familiar with the process.
The EC approved the Holcim/Lafarge merger on 15 December, subject to commitments, following a Phase I investigation. The deal cannot close until the EC has approved the buyer of the assets.
The EC does not have a fixed deadline for a decision and took as long as two months in the buyer approval process following Telefonica Deutschland’s [FRA:O2D] acquisition of E-Plus. "Up to two months" for approving a buyer is not unusual, a fourth source close commented. A number of other regulators will also need to approve the buyer in a similar process, the source added.
The proposed buyer assessment does not entail any formal market testing, the fourth source said. But, in the buyer approval process for E-Plus/Telefonica, the EC approached competitors involved in remedy negotiations with requests for information.
The parties have agreed to sell all of Lafarge’s operations in Germany, Romania and the UK (with the exception of the Cauldon cement plant); all of Holcim’s businesses in Slovakia and the Czech Republic; many of Holcim’s assets in France and some of Holcim’s operations in Spain. Assets in Brazil, Canada and the Philippines are also being sold.
Brazilian regulator CADE has given conditional approval. The groups are still awaiting approval in the US and Canada, according to the fourth source.
In the meantime, financing banks are preparing packages for the global assets, the second source said. For the bids that went in for separate parts of the business, financing packages will be offered by the local banks where the assets are based, he added.