Lafarge to buy Orascom Cement for $12.8 bln
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Mon, 10 Dec 2007 07:11:02 GMT |
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PARIS (Reuters) - Lafarge , the world's biggest cement maker, said it had agreed to buy Orascom Cement for 8.8 billion euros ($12.81 billion), in a deal that would boost its earnings and exposure to high-growth emerging markets.Orascom Cement is a unit of Egypt's Orascom Construction Industries . The deal will see Orascom Construction Industries' shareholder Nassef Sawiris take an 11.4 percent stake in Lafarge and have a seat on Lafarge's board.Lafarge said on Monday that as part of the acquisition, it would take on 1.4 billion euros of debt. The French company will finance the acquisition with 6 billion euros of debt and by raising 2.8 billion euros in equity.Lafarge said buying Orascom Cement would give it a leading position in the Middle East and Mediterranean basin region. It added that the deal would result in synergies of more than 150 million euros a year.LAFARGE RAISES FINANCIAL TARGETSLafarge also raised its financial targets as a result of this acquisition. Lafarge said it was expecting net earnings per share of more than 15 euros in 2010 and free cash flow of more than 3.5 billion euros in 2010.The French company also said it planned asset sales of 1 billion euros over the next two years."This acquisition of a leading Egyptian group is a decisive opportunity to accelerate our profitable growth strategy in cement in emerging markets," Lafarge Chairman and Chief Executive Bruno Lafont said in a statement."As a result of the transaction, 65 percent of Lafarge's EBITDA (earnings before interest, tax, depreciation and amortization) is expected to be generated in emerging markets in 2010, relative to 45 percent in 2007," he added.The deal is expected to be completed at the end of the first quarter of 2008.(Reporting by Sudip Kar-Gupta, editing by Will Waterman)
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