Publicly listed, PT Semen Indonesia Tbk (IDX: SMGR) has agreed to sold 15 percent shares of its unit, PT Solusi Bangun Indonesia Tbk (IDX: SMCB) to Taiheiyo Cement Corp - Photo by the Company
JAKARTA (TheInsiderStories)PT Semen Indonesia Tbk (IDX: SMGR) has signed the Conditional Sales Purchase Agreement to acquire 6.18 million or representing 80.6 percent of of PT Holcim Indonesia Tbk (IDX: SMCB) shares. The closing of the transaction is subject to customary regulatory approvals.

The state-owned cement producer bought the shares from Switzerland’ LafargeHolcim Ltd., for approximately US$917 million. The proposed acquisition will be undertaken by PT Semen Indonesia Industri Bangunan, a subsidiary wholly owned by the company.

Quoting the written statement released on Monday (12/11), LafargeHolcim said, the signing of the acquisition of share ownership was conducted yesterday. The global cement producer had decided to invest Holcim Indonesia as part of the ongoing portfolio review.

The assets to be sold to Indonesia include the entirety of Lafarge Zero operations in Indonesia, which consists of 4 cement plants, 33 ready-mix plants and 2 aggregate quarries.

As part of the company new milestone Jan Jenisch, CEO of Lafarge Holcim said, its committed to at least CHF2 billion in investments in the next couple years.

“The proceeds will significantly improve our debt ratios with the target of 2 times. Net Debt to Recurring EBITDA will be achieved by the end of 2019,” he said.

Holcim Indonesia has suffered from overcapacity and price pressure in recent years, placing pressure on profit margins. Nevertheless, the long-term potential of the market and the company’s strong market position make this a significant and surprising move.

This can be seen from the performance of Holcim Indonesia, which until the third quarter of 2018 still booked a loss of Rp. 630.5 billion. Although it decreased compared to the third quarter of 2017 which reached Rp. 647.9 billion.
Meanwhile, Semen Indonesia said today (13/11), this will significantly strengthen the domestic footprint through the acquisition of the 3rd largest cement company in Indonesia, with four cement plants with capacity of 14.8 metric ton (MT) per annum capacity and 30 ready-mix plants.

Furthermore, it said, the acquisition will provide Semen Indonesia with a significantly larger capacity and broader product portfolio and geographical footprint to fully capitalise on these tremendous growth opportunities in the domestic market.

The transaction will also strengthen the state-owned cement industry resilience in Indonesia. Currently, there are 15 cement companies in Indonesia with total installed capacity if 107 MT p.a, whereby 63 percent capacity share is owned by private and
foreign players.

President Director Hendi Prio Santoso conveyed, “In the
competitive environment of national cement industry, the combination between Semen Indonesia and Holcim will be stronger and larger. Our Group becoming the largest cement company in South East Asia with 53 MT cement capacity p.a.”

Furthermore, the tender offer for the remaining 1.48 billion SMCB’ shares or representing of 19.4 percent of paid up capital, owned by public shareholders, will followed the Financial Service Agency
Regulation POJK Number 9 Year 2018.

Holcim Indonesia is a public company, established in 1971, 80.6 percent owned by Holderfin BV (a subsidiary of LafargeHolcim) and 19.4 percent owned by public shareholders. The company is the third largest cement company in Indonesia and has four cement
plants located in Lhok Nga (Aceh), Cibinong (West Java), Cilacap (Central Java), and Tuban (East Java) and distribution terminals in Sumatera and Kalimantan.

While, Semen Indonesia was established in 1957 in Gresik, Indonesia. In 1995, Semen Indonesia consolidated with PT Semen Padang and PT Semen Tonasa and was known as Semen Gresik Group.

In 2013, Semen Gresik Group changed its name to be Semen Indonesia as strategic holding company that owns PT Semen Gresik, PT Semen Padang, PT Semen Tonasa, and Thang Long Cement JSC.

The company become publicly listed on the IDX since 1991. 51 percent of the shares are owned by the Government of
Indonesia and the remaining 49 percent.

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