Baring Asia, Glenwood take over Korean cement business

Baring’s investment came from its sixth and largest private equity vehicle which closed on $3.98bn last year.

Hong Kong-based private equity firm Baring Private Equity Asia and South Korean firm Glenwood Private Equity have acquired Lafarge Halla Cement, the Korean subsidiary of LafargeHolcim, according to a statement.

The firms bought 100 percent of Lafarge Halla Cement from its parent company for an estimated KRW 560 billion ($469 million; €420 million).

Global cement company LafargeHolcim has sold the company as part of a broader global divestment programme, including offloading assets in Saudi Arabia and Morocco, estimated at CHF 3.5 billion ($3.7 billion; €3.2 billion), it said in its 2015 annual report.

Baring Asia’s investment was structured through its latest vehicle, Baring Asia Private Equity Fund VI, the firm’s largest fund which closed on nearly $4 billion last year. It secured commitments from the Canada Pension Plan Investment Board, Teachers’ Retirement System of the State of Illinois, New York State Common Retirement Fund and the Oregon Public Employees’ Retirement System, according to PEI Research & Analytics.

Baring and Glenwood will rebrand the company as Halla Cement post-acquisition.

Halla Cement is one of the major cement producers in South Korea, with an annual cement capacity of 9 million tonnes. The company operates 10 distribution centres across the country and employs 500.

“Halla Cement is a leading cement player with operational and technical capabilities on par with global standards,” Han Chul Kim, managing director of Baring Asia, said in the statement. “We couldn’t imagine a more solid platform from which to access the growth opportunities in the Korean market in the coming years.”

Lafarge’s assets in India are currently up for sale, following its merger with Swiss company Holcim in July 2015. Private equity firms Blackstone Group, The Carlyle Group, Advent International and AION Capital Partners have expressed interest.

The Competition Appellate Tribunal of India has, however, held back the sale of 11 million tonnes of cement capacity by Lafarge India after an appeal by KKR-backed cement company Dalmia Cement in April.

In 2013, Baring Asia picked up a 14 percent stake in Lafarge’s India business for $256 million and sold it back last year in a deal valued at about $303 million.

Baring Asia has more than $10 billion in assets under management. It has more than 35 portfolio companies across Asia with estimated sales of $31 billion in 2015. It employs more than 125 staff across its offices in Hong Kong, Shanghai, Beijing, Mumbai, Singapore, Jakarta and Tokyo.

In other news, the firm has also recently acquired a 35 percent stake in business process outsourcing company Telus International. The financial details of the transaction were not disclosed.

Glenwood Private Equity is headed by Lee Sang-ho, the son of former Samsung Group vice chairman Lee Hak-soo.