CVC Capital Partners Ltd. and KKR & Co. (KKR) are considering bids for units to be sold by cement makers Holcim Ltd. (HOLN) and Lafarge SA (LG) to win regulatory approval for their planned 29 billion-euro ($40 billion) merger, according to people with knowledge of the matter.
The two buyout firms have met with investment banks in the past month to discuss potential offers for the assets, which may fetch more than 5 billion euros, said the people, who asked not to be identified because the matter is private. Holcim shares jumped as much as 2.2 percent in Zurich, and Lafarge added 2.7 percent in Paris.
Holcim and Lafarge, which announced their merger plan in April, are working on a list of cement and building-aggregate plants to be sold in order to make a goal of merging in the first half of next year. Europe is expected to account for the bulk of the divestments as the region will have the biggest overlap between the Swiss and French companies.
Talks are at a preliminary stage, and CVC and KKR may bid alone or form consortia if they go ahead with the plan, the people said. Lafarge, based in the French capital, and Jona-based Holcim are expected to appoint advisers in the coming weeks once a shortlist of divestments has been finalized, they said.
Blackstone Group (BX) is among the buyout firms that have decided against bidding, one person said.
Representatives for Blackstone, CVC, Eurocement and KKR declined to comment.
Holcim said April 28 that talks over the asset sales needed to gain antitrust approval are “very positive,” with recovering European cement sales providing a favorable backdrop to doing deals. The region will account for two-thirds of expected disposals.
The world’s two largest cement companies are looking to wrap up the merger by the first half of 2015, with a committee comprised of executives from both sides working on the list of potential divestments.
Georgia-born Filaret Galchev, Holcim’s second-largest shareholder and chairman of Moscow-based Eurocement Group, has spent $2.3 billion acquiring about 10 percent of Holcim since 2008, according to data compiled by Bloomberg.
Lafarge traded 2.2 percent higher at 64.39 euros as of 1:12 p.m. local time, while Holcim was up 1.6 percent at 79.25 francs.
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