SMGR Acquires 80,6% Stake in Holcim
This Monday (12/11), PT. Semen Indonesia, Tbk. officially announced that it has signed a Conditional Sales and Purchase Agreement to take over 80,6% of stocks belonged to PT. Holcim Indonesia Tbk. for a value of more than $917 million, in a move to expand and control Indonesia’s cement market. The acquisition was done through Semen Indonesia’s subsidiary company, Semen Indonesia Industri Bangunan.
The transaction brings a lot of implications as Semen Indonesia became the largest cement industry in Southeast Asia, and into the top ten largest in the world. The state-owned business now has a capacity to produce 53 million tons worth of cement, adding more than 13 million of capacity from Holcim. With this step, Semen Indonesia will also hold 55% of all the market shares in Indonesia, bolstering its status as the main player in Indonesia’s cement market. According to Christy Halim, Equity Analyst at Trimegah Sekuritas, the acquisition will transform the cement market into a duopoly, as Semen Indonesia and Indocement will now hold over more than 80% of all the market shares. The condition will give a chance for Semen Indonesia to increase its revenues and consolidate Holcim’s assets.
Hendi Prio Santoso, the Chief Director of Semen Indonesia, has published a statement on the matter. “We are grateful to be able to announce a transformational acquisition by Semen Indonesia to maintain its position as the market leader in Indonesia. In an increasingly competitive market, this step will establish a stronger footprint for Semen Indonesia.” He also said that the steps taken shows a concrete realization of Semen Indonesia’s vision to support a sustainable development system in Indonesia. In related news, Semen Indonesia has also boosted exports to more than 10 countries in order to expand its market, with a 42% growth of total exports from 2017.
Financially, the news of acquisition proved fruitful for both Semen Indonesia and Holcim’s stocks. Holcim’s stocks, boosted by the news, went upwards more than 6% of its initial value, whilst Semen Indonesia’s stock value rocketed from Rp9.150,00 in Tuesday (13/11) to Rp10.300,00 by this Thursday (15/11). As the acquisition will be finalized on the coming days, our country’s cement industry will enter a new age, as Semen Indonesia is projected to transform the competitive map of both the local and the global cement market.
Sources:
CNBC Indonesia
Detik Finance
Bisnis indonesia