September 18, 2014 / 4:34 PM / in 4 years

CRH, PE firms mull bids for entire Lafarge-Holcim portfolio -sources

* CRH exploring bid for all of assets put for sale -sources

* Four private equity consortia also set to bid -sources

* Bids would value assets at 5-7 bln euros -sources

By Arno Schuetze

LONDON, Sept 18 (Reuters) - Irish cement maker CRH is exploring a bid for all the assets rivals Lafarge and Holcim must sell to steer their mega-merger past competition watchdogs, two sources familiar with the matter told Reuters.

Four consortia of private equity firms are also eyeing the whole portfolio, with bids valuing the assets at 5 billion to 7 billion euros ($6.5 billion-$9 billion) expected soon, the sources said.

Blackstone, Cinven and Canadian pension fund CPP are set to bid jointly for the assets, while Advent and BC Partners form another consortium, said three sources familiar with the matter.

Two sources said CVC was teaming up with three other limited partners. Bain, Onex and another limited partner form the fourth consortium, the sources said.

A spokeswoman for CRH said the company does not comment on market speculation.

A Holcim spokesman said: “As a general rule, we do not comment on sales processes as these discussions are legally privileged. As announced, the discussions with potential buyers have started in August.”

Blackstone, Advent, BC Partners, Bain and CVC declined to comment. Cinven, CPP and Onex could not immediately be reached for comment.

The Lafarge-Holcim merger, unveiled in April, would create the world’s top cement group with $44 billion in yearly sales and would be the industry’s biggest ever tie-up.

The move would help the pair slash costs, trim debt and cope better with the rising energy prices and sluggish demand that have hurt the sector since the 2008 economic crisis.


But competition regulators in some 15 countries, as well as the European Commission, are expected to take a hard look at the deal - which brings together the world’s top two cement makers with a combined stock market value of more than $55 billion.

The pair is seeking buyers for Holcim’s French activities, Lafarge’s German ones and other operations in Austria, Hungary, Romania, Serbia, Britain, Canada, the Philippines, Mauritius and Brazil. The sell-off would affect some 10,000 workers and account for about 3.5 billion euros of sales.

Holcim CEO Bernard Fontana told reporters the companies had received more than 100 expressions of interest from rivals and private equity firms, with several parties indicating a desire to buy the entire portfolio of assets.

Lafarge and Holcim have said they hoped to formally request EU approval for the merger by the end of this month, with an aim to close the deal by the first half of 2015.

A spokeswoman for Lafarge declined to comment on how the process was going beyond restating that it had received numerous expressions of interest in the assets put up for sale.

CRH is embarking on its own disposal plan under new Chief Executive Albert Manifold and plans to sell at least 10 percent, or 1.5-2 billion euros worth, of net assets.

Manifold said Holcim and Lafarge’s sale of mainly big, cement businesses would not overlap with CRH’s divestment of smaller, mainly European-based product-type subsidiaries.

CRH, which has adopted a strategy of smaller bolt-on acquisitions in recent years - spending 130 million euros in the first half of the year - has the capacity to spend some 1.5 billion euros on deals going forward, Manifold said in May.

On an analyst call in August, referring to the assets Lafarge and Holcim must sell, he said: “Like anybody else, if we see value there we’ll enter into the process.” ($1 = 0.7757 euro) (Additional reporting by Freya Berry in London, Padraic Halpin in Dublin and Gilles Guillaume in Paris; writing by Natalie Huet; editing by David Clarke)

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