Cement producers make offers for LafargeHolcim’s assets in Brazil

RIO DE JANEIRO, BRAZIL – Brazilian cement companies CSN Cimentos – a subsidiary of Cia Siderurgica Nacional – Cimentos Mizu, and Cimento Apodi – in which Titan Cement International has a stake – are among those interested in LafargeHolcim’s assets, according to two people with knowledge of the matter.

According to the sources, the three smaller companies have made offers for a larger volume of assets of Lafarge, which has 10 industrial units in the country, according to the sources, who requested anonymity to reveal confidential conversations.

Brazil’s largest cement companies, Votorantim Cimentos SA and Intercement Brasil SA, have also made offers, but only for the parts of the business they are allowed to acquire for competitive reasons.

Votorantim bid for units in the Northeast and Intercement bid for units in Rio, Espírito Santo, and Minas Gerais, according to the sources. The purchase of these parts could be allowed by Brazil’s antitrust agency CADE.

The sale process, which is being coordinated by Itau BBA, should not have a second round of proposals. According to the sources, Lafarge should negotiate directly with the interested parties and announce a winner or winners in August.

Lafarge expects to raise between US$1 billion and US$1.5 billion from the sale of its Brazilian operations, they said.

LafargeHolcim, Votorantim, Apodi, and Mizu did not respond to requests for comment Saturday. Intercement declined to comment.

LAFARGE HOLCIM WANTS TO LEAVE BRAZIL

In April, Switzerland-based LafargeHolcim, the world leader in the production of cement and other building materials, announced it would begin the process of withdrawing from Brazil, which includes a total of 10 industrial plants, as well as distribution centers, mixing terminals, and some mining facilities.

Exactly 7 years ago, the French Lafarge and the Swiss Holcim, two leading giants in the building materials sector, decided to merge their assets worldwide. The operation forced the 2 companies to sell a package of assets in several countries, including Brazil, to obtain the approval of the antitrust agencies, especially in the European Union.

LafargeHolcim has industrial units in the states of Minas Gerais, São Paulo, Rio de Janeiro, Espírito Santo, Bahia, Paraíba and Goiás. The company operates in the market with the brands Mauá and Montes Claros (retail) and Holcim (large customers) and currently employs about 1,400 people.

The decision to sell was taken by the group’s headquarters, located in Zurich, Switzerland, as part of a strategy to focus on countries with strong currencies and where it can secure greater profitability from its operations, which is not foreseen for Brazil.