ZURICH (Reuters) - LafargeHolcim has agreed to sell its Philippines operations in a deal valuing them at $2.15 billion, the world’s largest cement maker said on Thursday, as it continues to sell off units in fringe markets.
The Swiss company said it was selling its entire 85.7 percent holding in its Philippines subsidiary to beer to infrastructure group San Miguel Corporation, with the money used to pay down debt.
The deal is the latest by LafargeHolcim which earlier this month said it was selling its operations in Malaysia and Singapore, and also recently sold its Indonesian business.
The sale of four cement plants and one grinding plant in the Philippines is expected to be completed during the fourth quarter of 2019, LafargeHolcim said.
Chief Executive Jan Jenisch said the divestment meant the company had completed its exit from what he called the “increasingly hyper competitive arena in South East Asia “ where local competition has forced down prices.
It also meant LafargeHolcim was on track to exceed its target of reducing its net debt to recurring EBITDA ratio to 2 times or less by the end of the end of 2019.
LafargeHolcim’s debt ratio stood at 2.2 at the end of 2018.
The divestment of the company’s activities in Indonesia, Malaysia, Singapore and the Philippines for a combined value of $4.9 billion was more than 21 times the size of their recurring core operating profit, the company said.
“While this decision is based on our strategic portfolio review, we have reached very attractive valuations allowing us to achieve a new level of financial strength,” Jenisch said.
LafargeHolcim had targeted the sale of assets worth at least 2 billion Swiss francs by quitting non core markets and focusing on areas like North America and Europe.
Reporting by John Revill; Editing by Alexandra Hudson