Construction materials producer LafargeHolcim is to divest its Indonesian company Holcim Indonesia.
The firm has signed an agreement with Semen Indonesia, a leading materials company in the country, to dispose of its entire 80.6% shareholding in Holcim Indonesia for a value of US$1.75 billion, on a 100% basis.
The assets to be sold include all of LafargeHolcim’s operations in Indonesia, which comprise four cement plants, 33 ready-mix plants and two aggregate quarries.
The decision comes as part of LafargeHolcim’s ongoing portfolio review, aimed at accelerating deleveraging.
Jan Jenisch, CEO of LafargeHolcim, said, “As part of our Strategy 2022, Building for Growth, we have committed to divestments of at least CHF2 billion (US$1.98 billion).”
Jenisch said this divestment marked an important milestone in achieving this target and increasing the company’s financial strength.
He added, “The proceeds from this transaction will significantly improve our debt ratios with the target of two times Net Debt to Recurring EBITDA (earnings before interest, taxes, depreciation and amortization) to be achieved by the end of 2019.”
Closing of the transaction is subject to customary regulatory approvals.