According to Reuters, Holcim chief executive Bernard Fontana stated at a media briefing in Zurich, Switzerland that the two companies have received more than 100 expressions of interest for the assets. It was said that private equity funds and other cement manufacturers were amongst the interested buyers.
Some bids were also reportedly made to purchase the asset portfolio as a whole but Fontana stated that the price offered would be the ultimate deciding factor.
In a separate Reuters report, Lafarge indicated that in addition to how much value could be generated, the selection of buyers would be based on how fast the asset sale could be completed.
Although Fontana reportedly stated that discussions would commence this month, he did not disclose the bidding deadline.
The mass divestment is being undertaken in order to gain approval from competition regulators for the planned merger of Holcim and Lafarge that was announced in April this year. The combined entity, LafargeHolcim, would operate across 90 countries, potentially creating the world’s largest construction materials company.
The merger is expected to reach completion in the first half of 2015.
Merger cost impacts on Holcim
Restructuring and merger costs of CHF50 million ($AUD59.2 million) have impacted upon Holcim’s operating earnings before interest, tax, depreciation and amortisation (EBITDA) in the first half of 2014, in addition to an unfavourable exchange rate. However, on a like-for-like basis, the company stated its operating EBITDA had “increased slightly” by 0.2 per cent, and its operating profit before restructuring and merger costs was up 11.3 per cent on the previous year.
Net sales across all regions were impacted by negative currency effects and decreased by 6.1 per cent to CHF9.06 billion ($AUD10.7 billion) – although on a like-for-like basis net sales increased 4.8 per cent – and Holcim’s net income also decreased 13.5 per cent to CHF657 million ($AUD777.8 million).
“Holcim increased sales of both cement and aggregates in the first half of 2014, despite an uneven development of the global economy,” Fontana commented. “Group regions North America, Africa Middle East, and Europe recorded particularly strong cement sales.”
Holcim stated in its financial results that it expected the global economies to continue to show an uneven performance throughout the remainder of 2014, but that it remained “well on track” to achieve its target of a CHF1.5 billion ($AUD1.8 billion) increase on its 2011 figures by the end of the year.
Holcim’s Australian operations were not explicitly acknowledged in the financial results.
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