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LafargeHolcim divests activities in the Philippines

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World Cement,


LafargeHolcim has signed an agreement with San Miguel Corp. for the divestment of its entire 85.7% shareholding in Holcim Philippines Inc. This was done for an enterprise value of US$2.15 billion on a 100% basis. Closing of the transaction is expected in 4Q19 and is subject to customary and regulatory approvals.

Holcim Philippines Inc. operates four integrated cement plants and one grinding plant. San Miguel Corp. is one of the Philippines’ leading diversified conglomerates, with operations in beverages, food, packaging, fuel and oil, power, and infrastructure.

The proceeds of the transaction will allow LafargeHolcim to further improve its debt ratio by approximately 0.3 times. With the divestment of its activities in Indonesia, Malaysia, Singapore, and the Philippines, LafargeHolcim exits Southeast Asia at a total enterprise value (EV) of US$4.9 billion, representing a 2018 EV/recurring EBITDA multiple above 21 times. These transactions are highly value accretive and result in a significant deleverage of 0.6 times net debt to recurring EBITDA ratio. This is before the application of IFRS 16, at a constant foreign exchange and provided that the transaction is closed before the end of 2019.

“With the divestment of our activities in the Philippines, we are completing our exit from the increasingly hyper competitive arena in Southeast Asia,” said Jan Jenisch, CEO of LafargeHolcim. “While this decision is based on our strategic portfolio review, we have reached very attractive valuations, allowing us to achieve a new level of financial strength. We will have performed our target ratio of net debt to recurring EBITDA of two times or less by the end of 2019. We have delivered on the promised strengthening of our balance sheet and we are on track to accelerate the execution of our Strategy 2022 – ‘Building for Growth’.”

Read the article online at: https://www.worldcement.com/asia-pacific-rim/10052019/lafargeholcim-divests-activities-in-the-philippines/

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LafargeHolcim news Cement news 2018