Lafarge to acquire Orascom cement unit in Egypt for $12.9 billion

10 December 2007

Mumbai: Lafarge SA, the world''s largest cement maker, will acquire the cement unit of Orascom Construction Industries of Egypt for 8.8 billion euros ($12.9 billion).

The acquisition will make the Paris-based Lafarge SA the biggest producer of cement in Egypt, Algeria and the United Arab Emirates as well.

As part of the deal, Orascom chief executive Nassef Sawiris will buy an 11.4 per cent stake in Lafarge. Sawiris will make the investment through a holding company composed of other members of his family. The company will get ``more than one'''' Lafarge board seat, with the number to be decided next week.

Lafarge will finance the purchase with 6 billion euros of debt and the sale of 22.5 million new shares, the company said in a statement. The acquisition will be financed by BNP Paribas, Calyon and Morgan Stanley

The acquisition of Orascom, the biggest publicly traded cement maker in the Middle East, will add 45 million tonnes to Lafarge''s cement capacity.

Lafarge said the purchase would allow it to garner 65 per cent of its earnings before interest, tax, depreciation and amortisation from emerging markets by 2010.