CEMEX will invest in Indonesian cement maker
September 29, 1998
CEMEX S.A. de C.V. (CMXBY:OTC), today announced that it received confirmation from the Government of Indonesia, that it has the right to purchase a 14% minority interest of PT Semen Gresik, Indonesia´s largest cement manufacturer.
The transaction is valued at US$114.6 million, or US$1.38 per share. The Indonesian Government will retain a 51% interest in Semen Gresik following completion of the transaction. CEMEX plans to acquire up to an additional 6% of Semen Gresik´s outstanding shares through a tender offer.
"We welcome the finalization of this process and are pleased to be an investor in Indonesia´s future," said Lorenzo H. Zambrano, Chairman and CEO. "CEMEX maintains confidence in the long-term prospects for growth and prosperity in Indonesia and continues to view the country as an excellent choice for international investment. We look forward to moving ahead in a spirit of cooperation with our new partners."
The Semen Gresik transaction expands CEMEX´ presence in Southeast Asia and marks its second investment in the region in the last year. CEMEX acquired a 30% stake in Rizal Cement Inc., a Philippine company, in October 1997.
"Indonesia is a key part of CEMEX´ worldwide strategy. Our investment in Semen Gresik reflects the company´s global objectives in geographic diversification and is consistent with our goal of expanding our business in Asia," said Hector Medina, Executive Vice President of Planning and Finance. "Through our participation in Semen Gresik and Rizal, CEMEX has established a significant presence in two of the three largest markets for cement in Southeast Asia."
On September 18, 1998, the Government accepted CEMEX´s bid for 14% of Semen Gresik but, under the rules of the privatization process, then opened a five-day period during which competing bids were to be accepted and reviewed. CEMEX, as the preferred bidder, had the right to match any competing bids. According to a spokesman for the Indonesian Government, it did not receive other competing bids during this five-day period.
Founded in 1906, CEMEX is the largest cement producer in the Americas and one of the three most important producers of cement in the world, with a production capacity of approximately 52 million metric tons per year. CEMEX is the market leader in its operations in Mexico, Spain, Venezuela, Panama, and the Dominican Republic, and has a significant presence in the markets of Colombia, the Caribbean, the southwest region of the United States, and the Philippines.