Lafarge, Holcim: decisive phase for the sale of assets
Two consortiums funds and industrial cement industry remain in contention.
Lafarge and Holcim's assets generate the rush of investors
The circle tightens around the cement plant of Lafarge and Holcim. The two giants, who have achieved mid-December the green light from Brussels for their proposed merger to $ 39.5 billion, await second-round bids for the purchase of their assets in France, Germany, Great Britain , Canada, Austria, Hungary and Serbia, the Philippines and Brazil. A set weighing nearly 5 billion euros of turnover for an expected price of 5 to 7.5 billion euros.
A third defection
Four consortia fund of US private equity firms and industrial manifested themselves at the opening of the auction. But on the eve of entering the decisive stage that forces to submit binding offers, a third defection took place - after the German HeidelbergCement in November and Bath duo Onex next month - according to several sources : that the consortium formed by the Advent fund, BC Partners and Temasek. Global competition is very tight, the verification procedures open to candidates constraints and expectations very high sellers. The expected valuation range is at least eight times Ebitda of the assets sold (between 600 and 700 million per year). A requirement which would be based on the expectation of doubling within two years of the EBITDA margin of all that is now down cycle.
That leaves two consortia: the CVC with two sovereign wealth funds (Singapore's GIC and Adia, the Abu Dhabi Fund) and that formed by Blackstone, Cinven and Canadian MPC. These defections does not necessarily place them in a strong position to negotiate prices down. Industrial positioned themselves on pieces of the perimeter. The names of the Irish cement manufacturer CRH associated to the Mexican Cemex were cited, as well as the Turkish Sabanci, Brazilian Votorantim Cimentos and Indian UltraTech Cement and Birla. Or "a puzzle to 5 or 7 pieces to give the whole thing is very simple, if industrial property value the assets," says a source