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Local units of Lafarge, Holcim plan merger

CEMENT makers Lafarge Republic Inc. (LRI) and Holcim Philippines Inc. (HPI) are exploring the possibility of combining their businesses.

In a statement issued by LRI on Monday, it said its board of directors has “authorized the corporation to explore, study and consider the combination of all or part of its businesses with HPI in order to avail itself of the resulting synergies and opportunities that are anticipated under a combination that will benefit its stakeholders.”  See related story on B2-4.

HPI, on the other hand, said in a press statement filed with the local bourse that “the transactional structure of any resulting combination will depend on the outcome of the review by the parties and their further discussions.”

The planned merger does not include LRI’s manufacturing facilities in Bulacan and Iligan that are considered divested as part of such consolidation plan. LRI has two cement plants in Bulacan and Norzagaray, and also holds interests in its unit Lafarge Iligan Inc., which owns the Iligan plant.

Any divestment of these facilities, it said, will be subject to the agreement on the terms and conditions of the divestment—including the purchase price—with the potential interested third-party buyer(s), and to the completion of the combination.

For the first three months of 2014, LRI’s profits reached P1.1 billion, or 4 percent higher than in the same period last year.  This was mainly attributed to the sustained strong demand for cement in the country, which rose by around 8.6 percent compared to the first quarter of 2013.

The group’s net sales increased by 4 percent from January to March this year on the back of higher volume sold and slight increase in average selling price. 

Meanwhile, HPI reported that its first- quarter revenues hit P8.05 billion, from P7.17 billion in the first three months of 2013, up 12.3 percent year-on-year.

Net profit grew by 16.8 percent to P1.67 billion, from last year’s P1.43 billion, mainly due to the cement firm’s revenue hike along with increased operating efficiencies and effective cost-management initiatives.

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