CPPIB among groups still competing for Holcim-Lafarge assets: Reuters

(Reuters) – The battle for the assets cement firms Lafarge and Holcim must sell to get the go-ahead for their merger will likely be between three groups, several people familiar with the matter said.

The three groups expected to hand in binding bids by a mid-January deadline are: Irish cement maker CRH; Blackstone, Cinven and Canada Pension Plan Investment Board (CPPIB); a team consisting of CVC and sovereign wealth funds the Abu Dhabi Investment Authority (ADIA) and Singapore’s GIC.

France’s Lafarge and Swiss peer Holcim promised to sell overlapping assets worth about 12 percent of their combined revenues to secure European Union antitrust approval for their merger earlier this week.

The assets are seen fetching about 6 billion euros (US$7.5 billion), the sources said.

The firms hope their merger to create the world’s biggest cement maker with US$44 billion in annual sales will help them cut costs and cope better with overcapacity and weak demand.

Last month, Holcim said it had received more than 60 tentative bids from industry interests and private equity firms for the assets, which the cement makers had already flagged they would probably have to sell.

A large number of bidders, such as Italy’s Italcementi or Turkey’s Sabanci, are interested only in some of the assets, the sources said.

“The seller is likely to prefer a sale of the complete bundle to one buyer, as a divestment in pieces bears the risk of being left with unattractive, unsellable parts,” one of the sources said.

Some peers, including Germany’s HeidelbergCement and Mexico’s Cemex, have said they are not interested in the assets.

Some private equity teams, such as a consortium of BC Partners, Advent and Temasek, as well as a group comprising Bain and Onex, have also shelved their preparatory work, sources familiar with the deal said.

A Lafarge spokeswoman said: “The sales process is progressing well. Holcim and Lafarge have established a clear process for their divestments and we expect final bids early 2015.”

Onex, Sabanci and GIC were not immediately available for comment. The other companies and investors declined to comment.

By Arno Schuetze and Freya Berry

(Additional reporting by Natalie Huet, Conor Humphries, Francesca Landini and Ebru Tuncay; editing by David Clarke)

(This story has been edited by Kirk Falconer, editor of peHUB Canada)

Photo courtesy of Lafarge Group