San Miguel fails in takeover bid for cement maker Holcim Philippines
MANILA, NNA – Philippine conglomerate San Miguel Corp. has failed to acquire a majority stake in cement-maker Holcim Philippines Inc. after the transaction lapsed while the country’s anti-trust authority would not give regulatory approval for the takeover.
In a public disclosure, San Miguel said it would no longer proceed with the purchase of the entire 85.73 percent stake of Holcim Philippines for $2.15 billion through its subsidiary First Stronghold Industries Inc. as the transaction had already expired on May 10.
The huge deal came under the scrutiny of the Philippine Competition Commission (PCC), a body that regulates fair competition in the market. In January, the PCC had flagged the deal as an undesirable move that would likely result in “monopoly, increased market power, and potential collusion” in the cement sector.
It warned that any acquisition would drastically reduce competition in the market for grey cement in key areas in the Philippines such as Northwest Luzon, Metro Manila, and Central Luzon.
In a statement on Tuesday, the anti-trust body said the acquisition deal could not proceed after it rejected the firms’ proposed voluntary commitments because they were too insufficient to address competition concerns.
PCC said the two parties did not follow up and “have yet to file their respective comments to answer the competition concerns.”
In May 2019, San Miguel signed an agreement with LafargeHolcim for the acquisition in a move to enhance the former's foothold in the cement business. San Miguel also has businesses in food, beverage, fuel and power sectors.
Holcim Philippines, which is the country's largest cement maker, is a unit of global building material giant LafargeHolcim Ltd of Switzerland. In the Philippines, it has eight facilities and manufactures and distributes grey cement across the country.
Cement Holdings Corp., global firm Holderfin B.V., and Cemco Holdings Inc. will continue to take control of Holcim Philippines after the collapse of the buyout deal.
Emerging from lockdowns that the country imposed to curb the Covid-19 pandemic, Holcim Philippines said in a media statement that it has resumed operations in three of its four integrated cement plants and is well-positioned for a quick recovery.
It operates a unique network of production and distribution assets from Luzon to Mindanao, close to the urban centers where building materials are most needed.
The statement said LafargeHolcim will continue to strengthen its market leadership in the Philippines, one of the most high-growth countries in the Asia-Pacific.