October 26, 2018 / 1:22 PM / a year ago

UPDATE 2-InterCement sells Portugal, Cape Verde units to OYAK for $795 mln

(Updates with details on size of InterCement after transaction, background)

By Tatiana Bautzer and Andrei Khalip

SAO PAULO/LISBON, Oct 26 (Reuters) - Turkish conglomerate OYAK has agreed to acquire Brazilian cement firm InterCement’s units in Portugal and Cape Verde for around 700 million euros ($795 million), a source close to the matter said on Friday.

InterCement announced the deal, which includes three cement factories, two mills and other assets operating under its brand as well as that of Portugal’s Cimpor, earlier on Friday without disclosing its value.

InterCement, owned by Brazilian conglomerate Camargo Correa SA, bought Cimpor six years ago.

InterCement will keep its operations in South America as well as in Egypt, Mozambique and South Africa after the transaction.

Camargo had considered an initial public offering of its operations in Europe and Africa, Reuters reported earlier this year, expecting to replicate the success of the IPO of its Argentinian unit, Loma Negra Compania Industrial Argentina.

But Camargo decided it could obtain a higher price in a sale of its largest units to a strategic investor, the source added, asking for anonymity due to the sensitivity of the matter.

A second source said the IPO plans were hindered by the financial crisis that hit Argentina and contributed to the loss of Loma Negra shares, and also by a drop in the value of euro zone stocks this year.

“This transaction is part the debt reduction plan previously announced by InterCement and Cimpor in response to an adverse market context in South America, particularly Brazil,” InterCement said in a statement.

$1 = 0.8804 euros Reporting by Tatiana Bauzer in Sao Paulo and Andrei Khalip in Lisbon Additional reporting by Can Sezer in Istanbul and Paula Laier in Sao Paulo Editing by Paul Simao

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