Brazilian steel maker Companhia Siderurgica Nacional (SID) launched a 3.86 billion euro ($5.6 billion) bid for Cimentos de Portugal (Cimpor). SID offered 5.75 euros per share of Cimpor. The company asserted that the deal would result in the formation of one of the world’s largest cement producers, with an annual production capacity of 36 million
metric tons.
Cimpor is a Portuguese cement maker with presence in 13 countries across Europe, Asia, South America and Africa. It is the national leader in Portugal, Cabo Verde and Mozambique and has a strong presence in Brazil, Egypt, China, Spain, Turkey, South Africa, Tunisia, Morocco, India and Peru. Cimpor generates around 60% of its revenues from its operations in emerging markets, which have a substantial growth potential.
Companhia Siderurgica Nacional has been making considerable efforts to diversify its core business, investing in iron ore mining, cement and infrastructure projects. This transaction will increase the company’s diversification in terms of products, new markets and geographical asset location.
Companhia Siderurgica began producing and selling cement at the end of the second quarter of 2009, marking its entry into yet another new business that has strong synergies with its existing activities. The company already has leading positions in steel, mining and logistics businesses. This transaction will substantially expand and consolidate its presence in the cement business.
The company said it may use part of its available cash and/or finance part or all of the acquisition with financing lines from first-tier banks. The conclusion of the offer is subject to the acceptance by shareholders holding at least 51% of the shares of Cimpor’s capital stock and other regulatory approvals.
Read the full analyst report on “SID”
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