The Consunji Group, through DMCI Holdings Inc., Semirara Mining and Power Corporation, and Dacon Corporation, has completed the acquisition of Cemex Asian South East Corporation (CASEC) for $272 million—lower than the earlier announced $305.6 million.
In a disclosure to the Philippine Stock Exchange (PSE), DMCI said the deal secures nearly 90 percent ownership in CEMEX Holdings Philippines Inc. (CHP), marking the group’s strategic expansion into the cement manufacturing sector. The transaction was completed on Dec. 2, 2024.
The share purchase agreement between the Consunji Group and CEMEX Asia B.V. originally set a purchase price of $305.6 million for the acquisition, price is subject to customary closing adjustments based on CHP’s estimated working capital, cash and debt levels as of the closing date.
On Completion Date, the purchase price paid reflected the balances of the debt, cash, and working capital as provided by Cemex, which resulted in a price of $272 million.
After gaining control of CHP, the group is changing the company’s name to Concreat Holdings Philippines Inc., subject to shareholder approval at a special stockholders’ meeting to be held on Feb. 12, 2025.
CHP, which wholly owns APO Cement Corporation and Solid Cement Corporation, currently has a combined annual production capacity of 5.7 million tons. This capacity is expected to grow to 7.2 million tons by early 2025 upon completion of the expansion plant at Solid Cement Corporation.
“We are excited to welcome CEMEX Holdings Philippines into the DMCI group,” said Isidro A. Consunji, Chairman of the Board of DMCI, SCC, and CHP. “This acquisition aligns with our core expertise in engineering and construction and dedication to contributing to the infrastructure development of the Philippines,” he added.
To ensure a seamless transition, DMCI Board Advisor, Executive Vice President and Chief Finance Officer Herbert M. Consunji has been appointed President and Chief Executive Officer of CHP. He will lead turnaround efforts to further streamline operations and unlock synergies.
“Our priorities are to enhance the logistics network, optimize the product mix, manage production and operating costs, and leverage on potential operating synergies within the DMCI ecosystem,” said Herbert M. Consunji.
The acquisition is anticipated to strengthen the DMCI ecosystem, with captured markets for coal, long-term contracted power capacity, fly ash, and cement products.
At the financial close, DMCI secured a 51 percent effective stake in CHP, while SCC and Dacon Corporation accounted for 10 percent and approximately 29 percent, respectively.
The closing of the deal was contingent on the satisfaction of several customary conditions including approval from the Philippine Competition Commission, settlement of the mandatory tender offer by Dacon to the shareholders of CHP, and the disposal by Cemex Asia of its 40 percent interest in each of APO Land & Quarry Corporation and Island Quarry and Aggregates Corporation.
However, the parties agreed to waive the completion of Solid Cement’s expansion program, and the agreement was amended to defer compliance with that condition.
CHP is constructing a 1.5-million-ton integrated cement production line at its Solid Plant in Antipolo, Rizal. The new cement production line was scheduled to commence operations by September 2024. This expansion will effectively double the company's cement production capacity in the Luzon region and boost CHP's overall installed annual production capacity by 26 percent from 5.7 million tons to 7.2 million tons.
DMCI aims to return CHP to profitability by 2025 through synergies within the group. CHP, the Philippines' fourth-largest cement manufacturer, reported losses of P1 billion in 2022 and P2 billion in 2023, due to escalating costs and reduced sales volumes.
“We recognize CHP's operational and financial issues, but we are positive that we can turn it around by 2025 because of its ongoing capacity expansion and the clear synergies it brings to our group,” said Isidro A. Consunji. “While cement demand is currently soft, we expect it to rebound as our turnaround plan progresses, supported by the Build Better More program and the anticipated easing of interest rates next year,” he added.