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Holcim Raises Bid for Canadian Unit to Win Approval

May, 15 2007

(Bloomberg) -- Holcim Ltd., the world's second- biggest cement maker, won the backing of St. Lawrence Cement Group Inc. for a planned buyout of the Canadian subsidiary after raising its offer by 10 percent to C$630 million. Shareholders owning 21 percent of the Canadian company will be offered C$40.25 a share ($36.23), Montreal-based St. Lawrence said today in an e-mail. Holcim previously offered C$36.5 a share. The board of directors of St. Lawrence recommends shareholders accept the offer, the company said. 'The revised offer price is at the high end of the valuation range as established by the independent valuator,' Holcim said an e-mail. Holcim and its next biggest rivals, France's Lafarge SA and Cemex SA of Mexico, are racing to expand globally through acquisitions in both emerging and mature markets, where they can cut costs to improve efficiency. St. Lawrence plans to lift sales by shipping more surplus Canadian cement to U.S. markets to undercut higher-cost supplies imported from outside the region. Shares of Holcim have climbed 18 percent this year, giving the company a market value of 34 billion Swiss francs. Chief Executive Officer Markus Akermann is seeking to raise the company's stake at other producers around the world. In January, Holcim increased its share in India's Gujarat Ambuja Cements to more than 20 percent. Holcim entered North America in the 1950s with the construction of a cement plant in Beauport, near Quebec City. Revenue at St. Lawrence, which employs 3,300 people, increased 4.9 percent to C$386 million in the fourth quarter, driven by improved prices. By Joseph Heaven and Joao Lima