NOT FOR DISTRIBUTION IN OR INTO THE UNITED STATES
Holcim substantially expands its Australian business through the acquisition of Cemex Australia. Additionally, Holcim affirms its strategic partnership in China through the participation in the planned private placement of Huaxin Cement. The funds will be raised by a capital increase with a rights issue.
Holcim will acquire Cemex Australia, a company with countrywide operations in the aggregates, ready-mix concrete and concrete products business, including its 25 percent interest in Cement Australia, in which Holcim presently has a 50 percent shareholding.
This important strategic acquisition enables the Group to move into the aggregates and concrete business in an attractive mature market. Cemex Australia's most important market positions are located in the continent's densely populated eastern and southeastern states and in the mining belt of Western Australia - all of which are markets amongst the fastest growing regions in Australia.
The purchase price of AUD 2.02 billion (CHF 1.77 billion) for Cemex Australia and the 25 percent stake in Cement Australia will be financed entirely with equity.
In addition, the Board of Directors of Holcim has decided, subject to the approval of the necessary Chinese authorities, to fully participate in the planned private placement of Huaxin Cement (China) of up to CNY 4 billion. Based on Holcim's current stake in Huaxin Cement of 39.9 percent, this corresponds to an investment of up to CNY 1.6 billion (approximately CHF 250 million) also planned to be fully financed with equity.
The Board of Directors will convene an extraordinary general meeting on 8 July 2009, at which the shareholders of Holcim Ltd will be asked to approve a capital increase leading to an inflow of funds in the amount of approximately CHF 2 billion.
Acquisition of Cemex Australia strengthens Holcim's presence in Australia
Under a contractual agreement between Cemex and Holcim, the Holcim Group is to take over full ownership of Cemex Australia including the 25 percent stake in Cement Australia at an enterprise value of AUD 2.02 billion (CHF 1.77 billion). The purchase price corresponds to an EBITDA multiple of 6.6 times, based on an assumed EBITDA 2009. Closing of the transaction is contingent amongst others on the outcome of the due diligence process and the approval of the Australian authorities.
Acquisition strengthens Holcim Group in aggregates and ready-mix concrete segments
Cemex Australia mainly operates in the eastern and southeastern states of Queensland, New South Wales and Victoria, as well as in Tasmania and in the mining belt of Western Australia. The company owns 83 aggregate operations (crushed stone, gravel and sand) nationwide, with reserves of aggregates in excess of 1 billion tonnes, plus 249 ready-mix concrete plants and 16 pipe and concrete product plants. In 2008, it reached sales of approximately AUD 1.86 billion and an EBITDA of approximately AUD 313 million. The company currently employs approximately 2,800 employees. Cemex Australia also has a 25 percent interest in Cement Australia, in which Holcim holds a 50 percent stake. Cement Australia operates four cement plants and one grinding plant as well as several terminals and distribution centers along the east coast of Australia and in Tasmania. Cement Australia has an annual production capacity of 5.1 million tonnes of cement, including the expansion under construction in the Gladstone plant. In 2008, Cement Australia posted sales of approximately AUD 995 million and an EBITDA of approximately AUD 196 million. Cement Australia is presently proportionately consolidated by Holcim and will be fully consolidated post transaction, as will be Cemex Australia. The company currently has a workforce of some 1,300 employees.
Australia is a mature market with long-term growth prospects
From 1990 to 2008, the country's economy grew by an annual average of more than 3 percent. The markets benefitting from a growing population and a solid GDP growth are located in the east and southeast of the country and in the mining belt of Western Australia. The country has large reserves of natural resources like coal, iron ore and bauxite, which are important for the Asian region and especially China and India. Cement Australia is the country's largest cement producer and Cemex Australia is present in all important markets. The combination of these companies enables Holcim to include Australia in its strategy of expanding its aggregates and ready-mix concrete business in mature markets.
Huaxin Cement uses fresh capital for further growth in China
Huaxin Cement Co. Ltd. - the fourth largest cement producer in China and strategic partner of Holcim in a rapidly growing building materials market - has decided to increase its share capital through a private placement. Huaxin Cement intends to use the proceeds of up to CNY 4 billion to build two cement plants in new markets and expand capacities in existing markets. Cement capacity of currently 38 million tonnes per year will be increased by 17 million tonnes. The capital increase is open to all existing shareholders of the company. Based on the Holcim shareholding in Huaxin Cement of 39.9 percent, this corresponds to an investment of up to CNY 1.6 billion (approximately CHF 250 million).
By participating in the placement, Holcim confirms its commitment to further deepen the strategic partnership with Huaxin Cement.
Financing to be provided by a fully underwritten rights issue
To preserve Holcim's high level of liquidity, financial strength and credit rating, the planned acquisition of Cemex Australia and the participation in the private placement of Huaxin Cement are to be fully financed with equity. The Board of Directors proposes to execute the capital increase before the transactions in Australia and China are closed. The Board of Directors is therefore proposing the shareholders to approve an increase in share capital from the current CHF 553,530,790 by a maximum amount of CHF 110,706,158 to a maximum of CHF 664,236,948 through the issuance of a maximum of 55,353,079 fully paid-in registered shares with a par value of CHF 2 each. The invitation to, and the relevant resolutions to be considered at, an extraordinary general meeting to be held on 8 July 2009, will be sent to shareholders and will be published in the Swiss Official Gazette of Commerce on 17 June 2009. The proposed capital increase with proceeds of approximately CHF 2 billion was fully underwritten by UBS AG acting as Global Coordinator and Sole Bookrunner on behalf of a syndicate of banks.
The subscription price of the new shares, the final number of shares to be issued and the final subscription ratio will be determined by the Board of Directors and communicated before or on the day of the extraordinary general meeting. In no event will the number of new shares to be issued exceed 55,353,079. Trading of subscription rights on SIX Swiss Exchange is expected to take place from 10 July to 16 July 2009, with the rights exercise period expected to take place from 10 July to 17 July 2009. The first trading day of the new shares is expected to occur on 20 July 2009 while payment and settlement is expected on 23 July 2009. The newly issued shares will rank pari passu with the existing shares.
For Cemex Australia we also refer to www.readymix.com.au and for Cement Australia www.cemaust.com.au
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Holcim is one of the world's leading suppliers of cement and aggregates (crushed stone, gravel and sand), as well as further activities such as ready-mix concrete and asphalt including services. The Group holds majority and minority interests in more than 70 countries on all continents.
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Disclaimer Press Release
This press release constitutes neither an offer to sell nor a solicitation to buy any securities and it does not constitute an offering prospectus within the meaning of article 652a or article 1156 of the Swiss Code of Obligations or a listing prospectus within the meaning of the listing rules of the SIX Swiss Exchange. Investors should take their investment decision to buy or subscribe for new shares solely on the basis of a prospectus and the offer of securities of Holcim Ltd will be made solely by means of a prospectus to be published which will be held available at Holcim Ltd and UBS AG.
These materials are not for distribution, directly or indirectly, in or into the United States. These materials do not constitute or form a part of any offer or solicitation to purchase or subscribe for securities in the United States, Canada, Japan or Australia. The Securities mentioned herein have not been, and will not be, registered under the United States Securities Act of 1933 (the "Securities Act").
The shares and purchase rights may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act. There will be no public offer of securities in the United States, Canada, Japan or Australia.
This document is being distributed only to, and is directed at (a) persons who are outside the United Kingdom or (b) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or (c) high net worth entities, and other persons to whom it may otherwise lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "Relevant Persons"). The securities to which this document relates are available only to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be available only to or will be engaged in only with, Relevant Persons. Any person who is not a Relevant Person should not act or rely on this document or any of its contents.
The shares and purchase rights will not be offered in Australia except to certain persons to whom an offer may be made without disclosure under Section 708 (8) or Section 708 (11) of the Corporations Act 2001.
In Member States of the European Economic Area ("EEA") that as the date of this announcement have implemented the Prospectus Directive (each a "Relevant Member State"), this announcement and any offer if made subsequently is directed only at persons who are "qualified investors" within the meaning of Article 2(1)(e) of Directive 2003/71/EC (the "Prospectus Directive") ("Qualified Investors"). Any person in a Relevant Member State who acquires the securities in any offer or to whom any offer of the securities is made will be deemed to have represented and agreed that it is a Qualified Investor and that in the case of any securities acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, (i) the securities acquired by it in the offer have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Relevant Member State other than Qualified Investors; or (ii) where securities have been acquired by it on behalf of persons in any Relevant Member State other than Qualified Investors, the offer of those securities to it is not treated under the Prospectus Directive as having been made to such persons.