Big Changes in the Cement Industry as Semen Indonesia Acquires Holcim Indonesia
Semen Indonesia, the largest cement producer in Indonesia, announced in November 2018 that it has signed a conditional sales & purchase agreement with LafargeHolcim Ltd to acquire an 80.6 percent stake in Holcim Indonesia, the third-biggest cement producer in Indonesia.
It is Semen Indonesia unit Semen Indonesia Industri Bangunan that will acquire the Holcim stake. The acquisition will be financed using a syndicated bank loan that involves Bank BNP Paribas, Deutsche Bank AG, Maybank Kim Eng Securities Pte. Ltd., MUFG Bank Ltd., and the Standard Chartered Bank.
This USD $917 million deal not only rocks Indonesia's cement industry. And it not only makes Semen Indonesia's position in the domestic cement industry even more dominant, but it also turns the company into one of the world's largest cement manufacturers. Meanwhile, the price of USD $917 million is considered a bargain deal. Reportedly, Holcim initially asked USD $2 billion for (a 100 percent stake in) its Indonesia-based unit.
Currently, Semen Indonesia controls nearly 41 percent of the domestic cement market, while rival Holcim Indonesia controls a 14.6 percent slice of the cake. Therefore, when the acquisition is completed (which is expected to happen before the end of the year), Semen Indonesia will control more than half of the cement market in Indonesia. Holcim Indonesia owns four cement factories (in Aceh, West Java, Central Java, and East Java). Meanwhile, it has two distribution terminals in Sumatra and Kalimantan.
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This articles discusses:
• details surrounding Semen Indonesia's acquisition of Holcim Indonesia
• the impact this deal has on the cement industry/market in Indonesia
• an overview of Indonesia's cement industry (production, domestic consumption, price, export performance & market players)
Read the full article in the November 2018 edition of our monthly research report. You can purchase this report by sending an email to info@indonesia-investments.com or a WhatsApp message to the following number: +62(0)8788.410.6944
