Conglomerate San Miguel Corp. expressed optimism the Philippine Competition Commission will approve the acquisition of an 87.5-percent stake in Holcim Philippines Inc. by unit First Stronghold Cement Industries Inc.
“I am confident [we will get the PCC approval]. In the eyes of the public, those that gave comments including [Trade] Secretary [Ramon] Lopez that it’s good that a Filipino [company] acquired it [Holcim Philippines],” San Miguel president Ramon Ang said.
FSCII, a wholly owned unit of San Miguel-owned San Miguel Equity Investments Inc., signed this month an agreement to acquire an 87.5-percent interest in Holcim Philippines, the local unit of Switzerland-based LafargeHolcim Ltd.
San Miguel said Holcim Philippines had an enterprise value of $2.15 billion.
“Do you know that 35 percent of cement being sold in the Philippines today are imported cement? And the major players in the Philippines―Holcim, Cemex, Lafarge-CRH and Japanese firm Taiyo, and another Taiwanese―they are all foreigners. Don’t you want a Filipino to acquire it?” Ang said.
He said Holcim controlled less than 20 percent of the cement market in the country which should not pose a problem.
San Miguel earlier said the acquisition of HPI would increase the foothold of San Miguel Group in the cement business and provide the opportunity to expand nationwide.
San Miguel through unit San Miguel Northern Cement is building a 2-million-metric-ton cement plant in Pangasinan province.
San Miguel also owns Eagle Cement Corp. which operates a cement plant in Bulacan with a total capacity of 7.1 million MT.
HPI currently operates four integrated cement plants and one grinding plant with a combined annual capacity of 10 million MT. It is embarking on a $300-million expansion to increase capacity by 30 percent to 13 million MT by 2020.
San Miguel last week asked the Securities and Exchange Commission for exemptive relief on the conduct of a tender offer to the minority shareholders of HPI.
San Miguel asked the SEC to allow FSCI to conduct the mandatory tender offer for the Holcim shares once the PCC approved the deal.
San Miguel said the tender offer should be conducted after the completion of the post-closing purchase price in accordance with the agreement by the parties, as the move could still result in the upward or downward adjustment in the final purchase price.
The deal requires the PCC approval after the transaction exceeded the P2-billion threshold for mergers and acquisitions notifications.
San Miguel is required to conduct a tender offer for the remaining 14.27-percent shares held by the public.