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By: Marvin Germo | February 2, 2020

Less Competition In The Cement Industry

The Philippine Competition Commission (PCC), the country’s competition watchdog, has shown its concern with regards to the proposed acquisition of San Miguel Corporation (SMC) of Holcim Philippines, Inc. (HPI) for $2.15 billion. According to it, the transaction will reduce the competition in the grey cement market particularly in Luzon. Per the statement of the watchdog’s mergers and acquisitions office, the said buyout will substantially result in lessening of competition in the industry of grey cement both in Metro Manila, Central Luzon, and Northeast Luzon.

Catch me in my live training events! (quick plug)

The heart of why I do these seminars is I want to build a generation of Filipinos with the right foundation in stock investing.  I want to bring smart investing to every Filipino around the world! If you would like to know more about how you could time the market check out the training below.

Stock Smarts Taiwan – February 15, 2020
Stock Smarts Manila: March 14, 15, 21, 22 & 28, 2020
Stock Smarts Singapore: May 16 – 17, 2020
Stock Smarts New Zealand: June 6 – 7, 2020
Stock Smarts Sydney: July 11 – 12, 2020
Stock Smarts London: April 18 – 19, 2020

The Recent Acquisition Of Holcim Philippines

Last May, it was reported that SMC, the largest conglomerate in the Philippines, has bought Holcim Philippines, for $2.15 billion from Lafarge Holcim in Europe. This event was significant for the company as it made SMC the biggest cement player in the country. It was also disclosed on May 10 that Lafarge Holcim has signed an agreement with SMC to acquire an 85.7% stake in Holcim Philippines. This would equate to 5.5 billion shares with a per-share price of P16.80. Holcim has declared an exit from the fierce competition in the South East Asian region.

SMC Outperformed Foreign Cement Giants

The recent acquisition just proved that SMC beat foreign giants in the cement industry. It outperformed the Japanese company Taiheyo Cement Corporation and the Siam City Cement in Thailand and Anhui Cement Corporation in China. Lafarge Holcim disclosed that the exit from the stiff competition in South East Asia has not been bad for the fir. In fact, it was based on their portfolio review that they were able to reach a new stage to strengthen their financial capability. Holcim also had a previous transaction with Indonesia, Singapore, and Malaysia. The sale of the stake was done on the purpose of solidifying the balance sheet of the firm.

SMC To Create More Opportunities

After the acquisition, SMC is expected to create more opportunities nationwide as it strengthens its base in the cement industry. The recent expansion of SMC opens new doors not just for the firm itself but for the Philippine economy and investors as well. Because of the transaction, the firm is required to do a tender offer for the Holcim shares which are by the hands of its minority shareholders. The tender offer will be conducted after the final purchase price has been paid. This transaction would undergo the process of the Securities and Exchange Commission and the Philippine Competition Commission (PCC).

I’m excited to share my 5th book overall and the 4th book in the Stock Smarts series, Stock Smarts: Breaking the Resistance – How to time your traders perfectly. The heart of this book is to teach you strategic ways on how to come in and buy and sell stocks in a way where you come as the market is headed up and come out as the market is headed down. The book is now out and exclusive via Marvin Germo Book Orders.
For more details and to order my other books: Marvin Germo Book Orders