Bloomberg News

Votorantim Considers Joining Camargo to Buy Out Cimpor

April 01, 2012

Votorantim Participacoes SA, a Brazilian raw materials producer, is considering joining Camargo Correa SA to buy out cement maker Cimpor Cimentos de Portugal SGPS SA, two people familiar with the matter said.

Votorantim isn’t planning to make a higher offer than Camargo’s 5.5 euro-per-share ($7.36) or 2.48 billion-euro, bid for the 67 percent it doesn’t already own of Portugal’s largest cement maker, said the people, declining to be identified because talks are private. An official at the Sao Paulo-based Votorantim, who can’t be identified under corporate policy, declined to comment. The company owns 21 percent of Cimpor.

Camargo, Brazil’s second-biggest construction company and Cimpor’s largest investor, is seeking to double its share of the local cement market as demand surges ahead of the World Cup in 2014 and Olympics two years later. The Sao Paulo-based company, which owns 33 percent of Cimpor, disclosed the offer in a March 30 filing to the Portuguese securities regulator.

Votorantim, which also competes with Cimpor in the Brazilian market for cement, is considering exercising its right of first refusal to buy a 9.6 percent stake from Portugal’s state-owned lender Caixa Geral de Depositos SA, the two people said. That would give it a similar stake to Camargo.

Caixa said in a March 30 statement it would sell its stake in Lisbon-based Cimpor to Camargo if Votorantim doesn’t exercise its right. Votorantim said March 30 it will analyze Camargo’s offer for Cimpor and evaluate all alternatives, according to an e-mailed statement.

Hostile Bid

Camargo and Votorantim bought stakes in Cimpor in early 2010, derailing a hostile bid of 6.18 euros a share by Brazilian steelmaker Cia. Siderurgica Nacional (CSNA3) SA. Both companies held talks last year about buying the rest of Cimpor and dividing its assets, people familiar with the negotiations said in October. Camargo would keep Cimpor’s Brazilian plants and Votorantim would take the rest, they said.

Votorantim’s assets include Fibria Celulose SA (FIBR3), the world’s largest pulp producer. The company also produces orange juice, metals and steel in Brazil and other South American countries.

Odebrecht SA (ODBE4) is Brazil’s largest construction company.

To contact the reporters on this story: Francisco Marcelino in Sao Paulo at mdeoliveira@bloomberg.net; Cristiane Lucchesi in Sao Paulo at clucchesi5@bloomberg.net

To contact the editors responsible for this story: David Scheer at dscheer@bloomberg.net; Dale Crofts at dcrofts@bloomberg.net


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