Union acquires Alsons Cement

In yet another corporate acquisition bid, the Phinma-controlled Union Cement will be taking over majority control of the Alcantara-owned Alsons Cement.

In a disclosure to the Philippine Stock Exchange, Union Cement said it has agreed with Cemco Holdings Inc. to buy out the latter’s 88-percent shareholding in Alsons through a share swap scheme.

"Union Cement believes that the acquisition of Alsons Cement will solidify its position as one of the largest cement manufacturers and distributors in the Philippines and provide significant opportunities for both companies to realize revenue and cost synergies in the immediate future and over the long term," Union Cement vice chairman Oscar Hilado said.

Union Cement operates three cement plants in Northern and Central Luzon and a plant in Mindanao, turning out an annual combined cement capacity of 5.5 million tons equivalent for about 22 percent of the market.

Alsons Cement, on the other hand, has two dry process lines in Northern Mindanao with a total capacity of two million tons per year, accounting for eight percent of the domestic cement market.

Based on their agreement, Union Cement will issue about 1.1 billion new common shares in consideration for the 4.062 billion Alsons shares held by Cemco — or a pro-rata basis of one Union Cement share for every 3.7 Alsons shares.

Union Cement Holdings Corp., a majority shareholder in Union Cement and a joint venture between global cement giant Holcim and Bacnotan Consolidated Industries, has undertaken to vote in favor of Union Cement in the scheduled Sept. 22, 2002 meeting.

In compliance with existing rules, Union Cement will undertake a tender offer at a price of P0.28 per share, or an 86.7 percent premium to the closing price of Alsons at P0.15 on July 16, 2002.