ZURICH/SINGAPORE (Reuters) -- Indonesia's biggest cement maker Semen Indonesia is buying the local business of Swiss company LafargeHolcim for roughly $917 million, in a move that will consolidate the struggling Indonesian industry.
The acquisition "will provide it with a significantly larger capacity and broader product portfolio and geographical footprint," the state-owned cement maker said in a statement on Tuesday, adding that the move would enable it to fully capitalise on growth opportunities in its home market.
LafargeHolcim, the world's largest cement maker, said in a separate statement that it was selling its Indonesian business to Semen Indonesia as it reviews its portfolio to improve its financial strength.
Semen Indonesia said it had signed a deal to acquire the 80.6 percent that LafargeHolcim owns in PT Holcim Indonesia , and a fully owned subsidiary of the state firm would launch a mandatory offer for the remaining shares owned by public shareholders.
"In the competitive environment of national cement industry, the combination between Semen Indonesia and Holcim will be stronger and larger," said Hendi Prio Santoso, president-director, Semen Indonesia.
The cement industry in Indonesia - Southeast Asia's biggest economy - has been saddled with overcapacity and weak pricing power over the last few years, which has pulled down profitability of companies to near-record lows.
Acquiring Indonesia's third-largest cement company will provide the state-owned cement maker with four cement plants with a capacity of 14.8 metric tonnes per annum and 30 ready-mix plants, Semen Indonesia said.