Lafarge has announced the sale of its 47% minority stake in its joint venture with Elementia in Mexico. Together, the companies operate three cement plants, including the recently inaugurated 1 million tpa El Palmar plant in Hidalgo.
The sale of the stake for a cash consideration of US$225 million (€175 million) will contribute to Lafarge’s objective to reduce net debt.
The JV was only formed in January last year. As well as the new El Palmar plant, Lafarge’s Vito and Tula plants were also included, with a combined total capacity of around 2 million tpa. At that time the JV was painted as a means of enhancing Lafarge’s position within the Mexican market. However, now with Lafarge merging with Holcim, which has seven cement plants in Mexico, it may be that this ‘enhanced’ position seems less significant within this new context.
The sale of Lafarge’s stake in Elementia is subject to regulatory approval. It is worth noting that Mexico was not one of the countries addressed in Holcim and Lafarge’s list of divestments, announced in July, which were required to appease competition authorities.
Written by Katherine Guenioui
Read the article online at: https://www.worldcement.com/the-americas/22092014/lafarge-sells-stake-in-elementia-jv-524/