DMCI Holdings Acquires Cemex Philippines for $305 Million

Construction giant DMCI Holdings, Inc. expands to the cement business through acquisition of Cemex Holdings Philippines.

Construction giant DMCI Holdings, Inc. has expanded into the cement business through its acquisition of Cemex Holdings Philippines, Inc., the fourth largest cement company in the country.

In a disclosure to the Philippine Stock Exchange, Consunji-led DMCI Holdings announced, that together with the Consunji family’s  privately-owned company,  Dacon Corporation, and subsidiary, Semirara Mining and Power Corporation, they have acquired Cemex Holdings Philippines, Inc. (CHP) for $305.6 million.

The deal has been executed through a share purchase agreement with CEMEX Asia B.V. to acquire its entire holdings of 42,140,266 common shares in Cemex Asian South East Corporation (CASEC). CASEC is the majority shareholder in Cemex Holdings Philippines, Inc. with an 89.86% equity interest.

DMCI is set to acquire majority of the shares with a 56.75% stake in CASEC, while Dacon will secure 32.12% of the shares, and Semirara Mining and Power Corporation will purchase the remaining 11.13%.

“Cement manufacturing will be a good, strategic addition to our business portfolio. We can leverage our group’s expertise and create new revenue streams from this acquisition,” said DMCI Holdings, Dacon and SMPC chairman Isidro A. Consunji.

Clarification of Equity Value

In another PSE disclosure, DMCI confirmed that their purchase cost of $305 million, would imply an equity value of $340.1 million, or PHP 1.42 per share of CHP.

“CHP equity value of $340.1 million divided by the total outstanding shares of 13,489.226,623 would result to PHP 1.42 per share of CHP,” the company disclosed.

The announcement puts to rest speculations about the major acquisition that have been going on in the past few months, causing a surge in CHP’s stock price. However after the disclosure, it closed lower at PHP 1.36, down 28.42% on Friday.

The transaction is expected to close before the end of the year, contingent on key conditions, including clearance from the Philippine Competition Commission, and completion of a mandatory tender offer (MTO) to the minority shareholders of CHP.

Dacon has been appointed as the bidder for the MTO to acquire the remaining 10.14% of the total issued and outstanding capital stock of CHP.