SET-listed Siam Cement Plc (SCG), Thailand's largest cement maker, has acquired a 29% stake in PT Catur Sentosa Adiprana Tbk (CSA) with a transaction value of 1.035 trillion Indonesian rupiah (2.4 billion baht) to expand in that market.
The acquisition is expected to be completed in the third quarter of 2018. The purchase will be made through SCG Retail Holding Co, a wholly owned subsidiary of SCG in the cement-building materials business.
Roongrote Rangsiyopash, president and chief executive of SCG, said the company aims to expand its business in Asean, with Indonesia a major market.
"The size of this transaction is 0.41% of total assets stated in SCG's consolidated financial statements as of March 31," he said.
"After the transaction is combined with those in the past six months, the total size will be 4.84%."
CSA is a leading modern retailer and distributor of home products, with 27 stores under the name of Mitra, 10 of which are in major cities.
For the distribution business, CSA can access a network of more than 30,000 traditional building materials retailers nationwide.
A stake in CSA allows SCG to continue execution of its penetration into the high-growth and vast Indonesian market.
Mr Roongrote said the investment adds synergy to SCG's existing assets in Indonesia.
CSA is a listed company on the Indonesia Stock Exchange under the ticker CSAP.JK.
In 2017, CSA had consolidated sales of 23.7 billion baht and total assets of 12 billion.
SCG posted revenue of 175 billion baht last year in the cement building materials business, increasing by 3% from a year before. But profit dropped by 15% to 7.2 billion baht, with the company saying market competition in the country had hurt that category.
Earlier, SCG announced it was pushing forward an online distribution channel to embrace the e-commerce trend for younger consumers.
In Asean, SCG had total revenue of 106 billion baht last year, mainly from Indonesia, Vietnam, Laos, Cambodia and Myanmar, making up 24% of its total revenue of 482 billion baht. Its asset value stood at 573 billion baht last year.
SCG plans to spend an investment budget of 60 billion baht in 2018, including both domestic and overseas markets. That budget excludes mergers and acquisitions.