Brescia Group buys cement factory Lafarge, the largest Peruvian investment in Chile

By: Johan van Ginhoven

The purchase of cement factory Lafarge Chile by the Peruvian Brescia group, in a transaction involving $555 million dollars, is the largest investment made by a Peruvian company in Chile, according to the Chilean press, which will permit the Brescia group acquire a 34% share in the Chilean cement market, followed by Bio Bio with 31.5%.

The Peruvian holding group, through Inversiones Breca, signed a promissory purchase agreement thatinvolves all the cement assets the French company Lafarge owns in Chile.

According to newspaper El Mercurio, this acquisition from Brescia group is the second largest transaction in the Chilean market this year, after the sale of D&S to Wal-Mart, a US supermarket chain. With this purchase, Brescia group will be the greatest competitor in the cement business in Chile, buying a company that had sales of $384 million dollars last year, that is a leader in the cement business as well as aggregates and concrete.

Lafarge’s Chile general manager, Xavier Blondot, said the company will transfer 84.2% of the shares it owns in the company and will get paid $405 million dollars; the transfer also includes Lafarge’s participation in Inmobiliaria San Patricio, a real estate company.

On its part, newspaper El Mercurio states that Brescia group will launch by mid August a public offering to purchase 100% of the company’s shares at a price of $ 0.10 per share.

Newspaper La Tercera informs that the purchased assets include the cement plant La Calera, located in Valparaíso, with a capacity of 1.5 million tons; a mill located in Puerto Montt, with a capacity of 300 thousand tons; a second mill located in Ventanas, under construction at present, which will start operations in 2010. The transaction also includes 54 concrete plants, 5 aggregate plants, 1 mortar plant, among others.

In this respect, Celfin Capital, intermediary company in the transaction, said this acquisition opens an opportunity for other Peruvian companies to invest in Chile. This large investment occurs in a context where there are great Chilean investments in Perú, and this was not reciprocal. This constitutes an incentive and opens a door for new Peruvian investment in Chile.

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