BUSINESSHIGHLIGHTS
GLOBAL
Merger of equals for
Lafarge and Holcim
All-share deal would combine world’s two largest
cement and constructionmaterials producers
T
he world’s two largest construction materials producers, Lafarge and
Holcim, have proposed tomerge in an all-share deal.The transaction
would create a € 32 billion (US$ 44 billion) per year company with
earnings before interest, tax, depreciation and amortisation of € 6.5 billion
(US$8.9billion), and a presence in90 countries.
Thedeal,whichhasbeenapprovedbybothcompanies’ boards and their core
shareholders, is said tooffer annual savings of €1.4billion (US$1.9billion).
However, it may face regulatory hurdles, particularly in Europe, where there
are already various national concerns about the lack of competition in the
cement and aggregates sector.The companies acknowledged that theywould
have to sell businesses to make the transaction acceptable to competition
authorities.
Under the proposal,Wolfgang Reitzle, the incoming chairman of Holcim,
would chair thenew entity.BrunoLafont, chairman andCEOofLafarge, has
been lined-up asCEO.Holcim ismaking anoffer to exchange all outstanding
Lafarge shares for Holcim shares on a one-to-one ratio. Completion of the
deal is expected in the first half of 2015, subject to regulatory approvals.
EUROPE
Probe deepened
The European Commission has
opened an in-depth probe into the
proposed acquisition of Holcim’s
cement operations in Spain by
rival producer Cemex. It said its
preliminary investigation indicated
the proposed transaction might
reduce competition in certain
areas of Spain. It now has until 5
September decide whether the deal
is in linewith regulations.
QATAR
Metro contract
Qatar Railways Company has
awarded a US$ 3.3 billion contract
to design and construct the
11kmGoldLineof theDohaMetro
project – a twin tunnel with nine
underground stations. Contractor
Larsen & Toubro (L&T) secured
the order along with joint venture
partners Aktor, Yapi Merkezi
Insaat, STFA Group and Al Jaber
Engineering.
US
Flat first quarter
Manufacturer Caterpillar reported
revenues of US$ 13.2 billion for the
first quarter of 2014, a flat result
compared to2013.Netprofit for the
period was up +5% year-on-year to
US$ 922 million. The construction
industries division reported a sales
increase of +20% to US$ 5.06
billion, fuelled by North America.
Declines in the mining equipment
business draggedonoverall results.
PERU
Lima underground
A consortium headed by Spanish
contractors ACS and FCC has been
awarded a € 3.9 billion (US$ 5.4
billion) contract to expand the Lima
Metro in Peru. The contract is to
build Line 2 of the network as well
as a connection between Line 4 and
the Peruvian capital’s airport, with
a total of 35 underground stations
along35kmof tunnel.Construction
is expected to take five years, after
which the consortium will operate
the lines for 30 years.
VALUEOF 1:
SYMBOL AU$
BRL
UK£ CNY
€
INR
YEN MXN RUR SAR
ZAR KRW CHF
US$
AustralianDollar
AU$
0.47 0.539 5.47 0.656 56.1
92
11.91 31.8
3.38
9.79
960 0.802 0.901
BrazilianReal
BRL
2.15
0.251 2.54 0.305 26.1
42.9
5.54
14.8
1.57
4.56
447 0.373 0.419
BritishPound
UK£
1.85
3.98
10.1
1.22 103.9 171
22.1
59.0
6.26
18.1
1780 1.49
1.67
Chinese Yuan
CNY
0.183 0.393 0.099
0.120 10.26 16.9
2.18
5.83 0.618 1.791
176 0.147 0.165
Euro
€
1.52
3.27
0.82
8.33
85.4
141
18.1
48.5
5.15 14.91 1463 1.22
1.37
IndianRupee
INR
0.018 0.038 0.010 0.097 0.012
1.6
0.212 0.568 0.0603 0.175 17.1 0.0143 0.0161
Japanese Yen
YEN
0.011 0.023 0.006 0.059 0.007 0.608
0.1291 0.345 0.0366 0.1061 10.4 0.0087 0.0098
MexicanPeso
MXN
0.084 0.180 0.045 0.459 0.055 4.71
7.75
2.67 0.284 0.822
81
0.067 0.0756
RussianRuble
RUR
0.031 0.067 0.017 0.172 0.021 1.76
2.90 0.374
0.106 0.307 30.2 0.0252 0.0283
Saudi Riyal
SAR
0.296 0.636 0.160 1.618 0.194 16.597 27.304 3.525 9.427
2.90
284 0.237 0.267
SouthAfricanRand ZAR
0.102 0.220 0.055 0.558 0.067 5.728 9.424 1.217 3.254 0.345
98
0.082 0.092
SouthKoreanWon KRW
0.0010 0.0022 0.0006 0.0057 0.0007 0.0584 0.0960 0.0124 0.0332 0.0035 0.0102
0.00084 0.0009
Swiss Franc
CHF
1.25
2.68
0.67
6.81
0.82 69.90 114.99 14.85 39.70 4.21 12.20 1197
1.123
USDollar
US$
1.11 2.385 0.599 6.067 0.7286 62.24 102.4 13.22 35.35 3.75 10.865 1066.01 0.8904
For exampleUS$ 1=AU$ 1.11
Exchange rates: April 2014
QATAR
Contractor Habtoor
LeightonGroup reached a settlement
over a dispute inQatar. It began legal
action last year overmoney owed by a
client inDoha for a construction project
– reported to be theUS$325million
DohaCity Centre Expansion. The client
will repay 40% of the funds owed, with
the balance following project handover.
FINLAND
Lemminkäinen is to
bring a case to theHelsinki Court of
Appeal against a fine levied against
it last November, when it was found
guilty of acting as part of an asphalt
cartel. It was ordered to pay
€
48
million (US$ 67million) in damages,
interest and legal expenses. The
amounts decided by theDistrict Court
were booked in Lemminkäinen’sQ4
2013 results, leading to an operating
loss for the quarter and year.
SWEDEN
Manufacturer Sandvik
Construction’s revenues for the first
quarter of the year were down -7%
on the same period last year to SEK
1.87 billion (US$ 285million). The
divisionmade an operating loss of
SEK 11million. Revenueswere down
significantly inAfrica, Australia, the
Middle East andSouthAmerica.
US
Manufacturer Astec has acquired
Telestack, aUK-basedmaker of
material handling systems for the port,
aggregate andmining industries. The
value of the deal is US$ 36million.
Astec said it expected to see synergies
between Telestack and its own
aggregates product lines.
international
construction
may 2014
BUSINESSNEWS
10
FINLAND
Metso rejectsWeir take over offer
Finnish crushing and screening
equipment manufacturer Metso
rejected an all-share takeover offer
fromUK engineerWeirGroup.
Under the proposal Metso
shareholders would have received
0.84Weir stocks for every share they
held, resulting inMetso shareholders
owning37%of thecombinedentity.
In rebuffing the offer, Metso said,
“The board of directors of Metso
has carefully evaluated the proposal
received from Weir and has come
to the unanimous conclusion that
this proposal is not in the best
interest of Metso shareholders. As a
consequence, the board has rejected
Weir’sproposal and seesno reason to
commence discussions regarding a
potential combination.”
