Bursa Community
Would you like to react to this message? Create an account in a few clicks or log in to continue.
Bursa Community

Bursa Malaysia Stock Forum - Enriching You!


Malaysia’s Lafarge and Holcim M&A in the offing?

Bursa Community :: Community News

Go down

Malaysia’s Lafarge and Holcim M&A in the offing? Empty Malaysia’s Lafarge and Holcim M&A in the offing?

Post by Cals Thu 10 Apr 2014, 01:15

Malaysia’s Lafarge and Holcim M&A in the offing?
Business & Markets 2014
Written by RHB Research   
Wednesday, 09 April 2014 09:59

Lafarge Malaysia Bhd
(April 8, RM8.80)
Maintain buy with target price of RM9.61: We welcome the news that Lafarge SA and Holcim Ltd have agreed to merge and create the world’s biggest cement maker, with more than US$40 billion (RM130 billion) in sales. The enlarged entity, to be called LafargeHolcim, will also cut overcapacity and energy expenses.
This may lead to a merger with or acquisition of Holcim Malaysia Sdn Bhd that we deem synergistic as it will fortify Lafarge Malaysia’s leading position in Peninsular Malaysia’s cement market.
Lafarge Malaysia has not made any announcement pertaining to the merger. Holcim Malaysia is currently operating a 1.2 million tonne per annum (tpa) grinding plant in Pasir Gudang, Johor, — that leads us to believe a potential asset injection of this unit into Lafarge Malaysia is possible. We do see synergy on the possible merger or acquisition of Holcim Malaysia, as Lafarge Malaysia is also operating a separate 700,000tpa grinding plant in the same area to service clients in Peninsular Malaysia’s southern region.
Lafarge Malaysia’s integrated plant in Langkawi, Kedah, has been exporting excess clinker at a marginal cost. Hence, the transaction may see Lafarge Malaysia possibly channelling the excess clinker to Holcim Malaysia at better margins, as the larger quantity may mean savings in logistics costs. Apart from that, the merger may also further fortify Lafarge Malaysia’s leading position in the local cement market, with market share increasing to almost 40% from one-third currently.
We also continue to think that the market may have overlooked the recent cut in cement rebates, which could be sufficient to cover higher power costs, while a revision of its list price may also be around the corner. Coupled with the potential synergistic merger with Holcim Malaysia, we are keeping our “buy” recommendation on Lafarge Malaysia with our target price unchanged at RM9.61. — RHB Research, April 8
[You must be registered and logged in to see this image.]

This article first appeared in The Edge Financial Daily, on April 9, 2014.
Cals
Cals
Administrator
Administrator

Posts : 25277 Credits : 57721 Reputation : 1766
Male Join date : 2011-09-08
Location : global
Comments : “My plan of trading was sound enough and won oftener that it lost. If I had stuck to it I’️d have been right perhaps as often as seven out of ten times.”
Stock Exposure : Technical Analysis / Fundamental Analysis / Mental Analysis

Back to top Go down

Back to top

- Similar topics

Bursa Community :: Community News

 
Permissions in this forum:
You cannot reply to topics in this forum