Eagle purchase cements SMC foothold in industry

MANILA, Philippines — San Miguel Corp. aims to further strengthen its position in the cement business with its acquisition of Eagle Cement Corp.

SMC is hoping to close the transaction by the end of the year or the first quarter of 2023, depending on the regulatory approvals.

“The acquisition of Eagle Cement offers a complementary approach to the current investment strategy of SMC in the cement industry, will increase its foothold in the cement business and provide the opportunity to implement its plan to expand its cement business,” SMC said in a regulatory filing yesterday.

SMC’s existing cement business is under San Miguel Equity Investment Holdings Inc. Northern Cement Corp. is also an affiliate of SMC. It attempted to acquire Holcim Cement in 2020 but talks collapsed amid stumbling blocks with the Philippine Competition Commission (PCC), the government’s anti-trust body.

On Tuesday, SMC disclosed that it  signed a share purchase agreement to acquire an  88.5 percent stake in Eagle Cement, the listed cement company owned by the Ang family, for P22.02 per share.

At P22.02 per share, Eagle Cement will fetch P96.8 billion from the sale of an 88.5 percent stake to SMC.

SMC said this would be paid in cash, which would be paid in tranches.

The proposed transaction will trigger notification and clearance with the PCC.

It would also require SMC to do a tender offer of the shares held by the minority shareholders of Eagle Cement.

However, SMC said it would also file a request with the Securities and Exchange Commission (SEC) to allow SMC to commence the tender offer after it has obtained the approval from  PCC.

SMC is headed by tycoon Ramon Ang as its president and CEO. He is also chairman, president and CEO of Far East Holdings, a selling shareholder of Eagle Cement. He is also the chairman of Eagle Cement.

His son John Paul Ang, meanwhile, is a member of the board of SMC and is the president and CEO of Eagle Cement.

Eagle Cement raked in P13.7 billion in revenue in the first half of 2022, higher than the P11 billion churned in a year ago.

Net income amounted to P3 billion compared to P3.7 billion last year.

The company’s cement bags are sold under Eagle Cement Advance and Eagle Cement Exceed while its bulk cement is sold under the Eagle Cement Strongcem brand.

Eagle Cement has a cement plant in Bulacan and a grinding and packaging facility in Bataan.