Holcim to sell Philippines unit to China's Huaxin in $807 million deal
Holcim's Strategic Divestment and Future Growth Plans
By John Revill
Details of the Philippines Unit Sale
Aug 2 (Reuters) - Swiss building materials supplier Holcim Group said on Sunday it plans to sell its Philippines business to China's Huaxin Building Materials in a deal that could raise at least $807 million.
Breakdown of the Deal
Holcim will sell an initial 68% stake for $527 million with the remainder to be sold over the next three to five years for a minimum price of $290 million.
This would lead to an overall valuation of $807 million, although the figure could rise "based on incremental value creation during this period," Holcim said.
Use of Proceeds
Money raised from the sale will be used to fund large acquisitions and also further investment in Holcim's existing business.
Holcim's Global Business Focus
Geographic Strategy Shift
The Swiss company has been focusing more on Europe, Latin America, North Africa and Australia as it reshapes its business after spinning off its North American operations into a separate company last year.
Acquisition Plans and Financial Strategy
Acquisitions have been identified as a key part of Holcim's growth strategy, with the company planning to make around 15 deals in 2026.
Holcim last year said it had 3 billion Swiss francs to 4 billion Swiss francs ($3.72 billion to $4.95 billion) to spend on acquisitions up to 2030, and could raise up to 6 billion Swiss francs more from divestments and extra borrowing for large deals and share buybacks.
CEO's Outlook on Acquisitions
Holcim CEO Miljan Gutovic on Friday said the company had a "very healthy pipeline" of acquisition projects in Latin America, Europe and also parts of Asia, Middle East and Africa, and was also considering large deals.
"We are constantly screening our landscape, from walling and flooring solution companies all the way to roofing, and we believe there are some very attractive markets," he told analysts after the company's second-quarter results.
"I'm confident that we will have a strong momentum on the M&A front in the second half of this year," Gutovic added.
Additional Information
($1 = 0.8074 Swiss francs)
(Reporting by John Revill in Zurich and Sumedha Mukherjee in Bengaluru; Editing by Kate Mayberry and Joe Bavier)