Lafarge Surma to acquire Holcim at BB-set price

Lafarge Surma Cement has approved the acquisition of Holcim Bangladesh for Tk 504.78 crore, a price previously set by the Bangladesh Bank.

The company announced that its chief executive officer will complete the deal, according to a posting on the Dhaka Stock Exchange website yesterday.

The central bank on September 17 gave the nod to the acquisition, saying Lafarge can remit Tk 504.78 crore for 88,244 shares of Holcim.

The price set by the BB is 47 percent lower from the Tk 950 crore agreed during a share purchase agreement between the seller and the buyer.

The transaction was supposed to be completed within a month of the BB approval, but the company could not do it.

Later, it sought a time extension and the BB gave another 90 days to remit the money.

In October, Lafarge also asked the central bank to review the decision, according to a position paper of the company. But the BB did not change the share price.

At the DSE, the company's share price jumped 9.94 percent, or Tk 5.4, to close at Tk 59.70 yesterday.

The share price remained under pressure in the last three months as the central bank did not give the approval for acquiring Holcim at the company's expected price.

The share price went down to Tk 51.40 on December 20, the lowest in the last two years, according to the DSE.

In November last year, the board of Lafarge Surma announced that it was exploring the opportunity of combining the businesses of Holcim Bangladesh and Lafarge Surma.

The board approved the acquisition a month later. Each of Holcim's 88,244 shares was valued at $1,325.88 (Tk 1.06 lakh).

Upon completion of the transaction, Lafarge Surma will have a combination of production facilities, including the only clinker production facility in Bangladesh and four grinding plants across the country.

This will enable the company to optimise its network of production facility and create more cost-effective routes to the market.

The company will also become a major player with a production capacity of 4.2 million tonnes a year, according to the company.

Lafarge and Holcim, the two cement giants in the world, completed the merger at the global level in July 2015.

DAILY MARKET

Dhaka stocks continued its losing streak in the first session of the week as the institutional investors are exerting immense sales pressure eyeing the year's end.

The benchmark index, DSEX, fell 23.48 points, or 0.37 percent, to 6,159.31. Market turnover surged 2.18 percent to Tk 359.72 crore as retail investors were reluctant to participate in transactions amid a bearish trend.

“The market started the session on a positive note, but soon it fell due to the fall in the price of the major equities,” said UCB Capital Management in its daily market analysis.

Banking equities led the turnover, contributing 20.32 percent to the total, according to the analysis. At the DSE, 58 securities gained, 245 declined and 30 remained unchanged. The DS30 was 0.14 points in the red whereas the DSES was 0.40 points in the green.

Small cap companies dominated the turnover chart.

Nahee Aluminium Composite Panel topped the list, followed by National Tubes, BBS Cables, Rupali Life Insurance Company, Brac Bank and Padma Islami Life Insurance.