CCiments du Maroc, a subsidiary of the Heidelberg Materials group, has just announced the signing of a strategic agreement for the acquisition of 62.62% of the capital of Asment de Témara as well as 99.99% of Grabemaro, two entities belonging to Votorantim Cimentos. This transaction will allow Ciments du Maroc to strengthen its presence in the cement, ready-mix concrete and aggregates sectors, thus consolidating its position as one of the leaders in the Moroccan construction materials market. On the stock market, this transaction was well received when it was announced on Friday, with the cement manufacturer’s share price rising 10% immediately after the information was made public.
“The rumor has been circulating for several months. But the market was waiting for confirmation to react,” a banking analyst who covers the sector in particular tells us. According to him, the market regularly echoes mergers in the construction sector, particularly in cement and steel, which are experiencing low cycles, where players are operating at low speed and selling their production at low margins. Less solid players are tempted to tie up with larger operators with cash. But deals do not always come to fruition and negotiations can be tough. So seeing this one come to fruition could be a good signal of the start of a wave of mergers that would allow the market to recover overall with a better organized offer.
Increase in production capacities
This acquisition involves a cement plant in Ain Attig, with a capacity of 1.4 million tonnes, eight concrete plants and two aggregate production sites. In addition, Ciments du Maroc will take a significant stake in the Moroccan Company for Grinding and Recycling of Materials, a key player in the sustainable management of industrial waste, an initiative aligned with the company’s environmental objectives. According to Mohamed Chaïbi, Chairman of the Board of Directors of Ciments du Maroc, this transaction is part of a long-term strengthening strategy on the Moroccan market.
The CEO, Severin Weig, specified, for his part, that the acquisition of Asment de Témara will allow Ciments du Maroc to consolidate its national coverage and better meet the growing needs of the Rabat-Salé-Kénitra region, a strategic area for the national economy. Despite our requests, the management has not yet decided on the amount of the transaction and its financing terms. Market operators favor the option of a payment where, at least, part would be in shares. Concretely, Ciments du Maroc would operate a capital increase for the benefit of the current owner of Asment Témara, Votorantim. Information that remains to be confirmed.
This acquisition comes at a time when the cement sector in Morocco is facing overcapacity in production, exacerbated by demand that has been falling for several years. Several market players are also questioning the relevance of such an operation at this precise moment, especially since the consolidation of the market will not allow cement prices to recover significantly in the short term. However, despite this low cycle, the medium-term outlook remains promising. Indeed, the resumption of major infrastructure projects and the expected boom in the construction sector, particularly in strategic regions such as Rabat-Salé-Kénitra, could mitigate the effects of the current overproduction.
This is perhaps the main bet of Ciments du Maroc, which therefore seems to be banking on a rebound in demand in these key areas, anticipating a growth dynamic supported by public and private investments in infrastructure. Asment de Témara operates in these regions. The purchase of a cement plant in such a strategic region could thus prove to be a wise choice in the long term, counterbalancing the current uncertainties. In the meantime, the deal is awaiting approval from the regulatory authorities.
