Solid deal cracks

A recent development in the local business sector highlights how the DMCI Holdings, Semirara Mining and Power Corp. (SMPC), Dacon Corp. and Cemex Asia B.V. deal is progressing.

The companies have signed an amendment to their April 2024 agreement regarding the sale of shares in Cemex Asian South East Corporation (CASEC).

The twist? The condition related to the Solid Cement expansion project, which was an addendum to the deal, has been dropped.

To provide some background, in April, DMCI, SMPC and Dacon Corp. announced their acquisition of Cemex Holding Philippines (CHP) for a significant $305.6 million, or approximately P17 billion.

The objective was to diversify their holdings and strengthen their market position. DMCI is set to acquire the largest share, taking a 56.75 percent stake in CASEC, while Dacon will hold 32.12 percent and SMPC the remaining 11.13 percent. CASEC is the majority shareholder of CHP, holding an 89.96 percent equity interest.

Dacon has been designated as the lead company for the mandatory tender offer to acquire the remaining 10.14 percent of CHP’s shares.

Regarding the amendment, it paves the way for the deal to proceed without the Solid Cement expansion condition. Post-closing confirmatory testing is expected to take place in early 2025.

All eyes will be on how this strategic move unfolds for the conglomerate and the cement market as a whole.

Great hangover

Megaworld’s liquor unit, Emperador Inc. (EMI), is facing a one-two punch from the continued weakness of the global economy and challenges posed by Donald Trump.

EMI reported a net income of P4.9 billion for the first nine months of 2024, a 30 percent decline year-on-year, and below analysts’ expectations, as it achieved only 52 percent of the 2024 consensus forecast. Revenues dropped by 8 percent to P43.2 billion.

RCBC Securities noted that the company’s brandy segment experienced a 10-percent decline for the first nine months, bringing in P25 billion. This was due to weak global demand, particularly in Spain, Mexico and the Philippines, which led consumers to opt for more affordable alternatives.

The Scotch whisky business also posted an 8 percent decline, totaling P6.2 billion, as the global spirits sector struggled with softening demand. Difficult trading conditions in China and the US further impacted profitability.

President-elect Trump has warned that he would impose a tariff wall against imports, which would significantly affect global trade, particularly in the US and China.