Camargo Corrêa buys into Cimpor

By Chris Sleight11 February 2010

In a fresh twist in the battle for control of Portuguese cement producer Cimpor, Brazilian Conglomerate Camargo Corrêa has bought a 22.17% stake in the company from contractor Teixeira Duarte.

The deal follows Votorantim's announcement last week that it would be acquiring Lafarge's 17.28% shareholding in the company.

Camargo Corrêa paid € 6.50 (US$ 8.93) per share for the 148.97 million shares, for a total of € 968 million (US$ 1.33 billion) in an off-market transaction. Only two weeks earlier, Camargo Corrêa had ruled itself out of buying-into Cimpor.

Although this latest deal seems likely to close CSN, the original hostile bidder for Cimpor, out of the picture, it also raises more questions.

With two domestic competitors - Votorantim and Camargo Corrêa - holding minority stakes in the company, there are obvious issues of conflict of interest and the overall control of the company.

It remains to be seen what Votorantim will do with its new shareholding in Cimpor. Under the terms of the deal with Lafarge, Votorantim received the shares in Cimpor either in exchange for certain assets and cash, or for the proceeds of a subsequent sale of the Cimpor shares.

This would leave the way open for Votorantim to sell its stake on to Camargo Corrêa, giving it a 39.45% share in Cimpor.

However, it remains to be seen how Cimpor's ownership structure will be resolved.

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