Philippine Conglomerate DMCI Holdings Acquires Cemex Philippines's Cement Business

DMCI Holdings Acquires Cemex's Philippine Cement Business for $305.6 Million

DMCI Holdings, a major Philippine conglomerate, has partnered with two companies owned by tycoon Isidro Consunji to purchase Mexico's Cemex's Philippine cement business for $305.6 million. The transaction includes acquiring Cemex Asia South East Corp, which holds approximately 90% of Manila-listed Cemex Philippines. Post-acquisition, DMCI will hold a 51% stake, while Dacon and Semirara will own 39% and 10% respectively. The deal, expected to conclude by year-end, is subject to regulatory approvals. Cemex Philippines, one of the largest cement producers in the country, manufactures 5.7 million tons of cement annually.

Key Takeaways

• DMCI Holdings, in collaboration with two other entities, is set to procure Cemex's Philippine cement business for $305.6 million.
• The acquisition encompasses Cemex Asia South East Corp, which possesses around 90% of Manila-listed Cemex Philippines.
• DMCI aims to capitalize on its expertise and generate new revenue avenues through this acquisition.
• Following the completion of the deal, DMCI will have a 51% ownership of Cemex Philippines, with Dacon and Semirara holding 39% and 10% respectively.
• Cemex Philippines ranks among the leading cement manufacturers in the country, producing 5.7 million tons of cement annually.

Analysis

The acquisition of Cemex's Philippine cement business by DMCI Holdings and partners holds significant implications. In the near term, it enriches DMCI's diverse portfolio and enables the creation of new revenue streams. For Cemex, it represents a strategic exit from a competitive market, allowing the company to redirect its focus to other regions. Over the long term, this move might reshape the Philippine cement market, potentially benefitting local construction firms and consumers through enhanced competition. However, it might also raise antitrust concerns. This shift could impact neighboring countries and global cement manufacturers, potentially leading to market adjustments. Overall, this strategic maneuver signifies a realignment of resources and strategic focus within the Asian construction materials sector.

Did You Know?

• Cemex: A Mexican multinational building materials company, Cemex stands as one of the world's largest cement companies, operating in over 50 countries while producing and distributing cement, ready-mix concrete, and aggregates.
• DMCI Holdings: A prominent Philippine conglomerate, DMCI Holdings has diverse interests spanning construction, mining, power, real estate, and water utility. Founded in 1954, it is controlled by the Consunji family.
• Cemex Asia South East Corp: As a subsidiary of Cemex, Cemex Asia South East Corp holds a significant presence in the Philippine cement market, owning about 89.9% of Manila-listed Cemex Philippines, making it a key entity in the Philippine cement industry.