Holcim has agreed to sell its business in Brazil to Companhia Siderúrgica Nacional (CSN) for an enterprise value of $1.025 billion, a move the world’s largest cement maker said would help shift its focus.
Holcim is trying to diversify away from its core business of cement and aggregates to focus more on building technology as it increases its emphasis on sustainability.
“This divestment is another step in our transformation to become the global leader in innovative and sustainable building solutions, giving us the flexibility to continue investing in attractive growth opportunities,” Holcim Chief Executive Jan Jenisch said in a statement on Friday.
The sale includes Holcim’s five integrated cement plants, four grinding stations, six aggregates sites and 19 ready-mix concrete facilities.
Reuters reported on Thursday that Brazilian steelmaker CSN’s cement unit was close to acquiring the Swiss group’s assets in the country. Holcim has made a number of divestments as it reorganises its business.
In January, it announced a $3.4 billion deal to buy roofing business Firestone Building Products from Japan’s Bridgestone Corporation, its biggest acquisition in more than a decade.
It said the sale to CSN in Brazil would significantly reduce its debt ratio, helping it to reinvest in the business segment it has been growing following the Firestone acquisition.
The deal is in line with CSN’s interest in acquiring rivals in a fragmented Brazilian market. “The deal adds 10.3 million tonnes per year to CSN’s capacity,” the company said in a securities filing early on Friday, adding its total capacity will reach 16.3 million tonnes.
Its cement unit in June bought smaller rival Elizabeth Cimentos for $218 million. Its planned IPO was shelved in July due to market conditions, but CSN still expects to list and raise money to fund deals.
Cement sales have grown sharply in Brazil this year on higher demand for real estate. According to industry group SNIC, total sales in the first eight months of the year rose 11.4% to 43.4 million tonnes.
Source: Reuters.com