Far Eastern cement producer Taiwan Cement Corporation (TCC) has acquired 40 percent of OYAK Cement, a concern of the Turkish Armed Forces Pension Fund, for an estimated $640 million.
The deal was the largest foreign direct investment (FDI) in Turkey in 2018.
OYAK Cement Group incorporates a number of companies, including Aslan Cement, Adana Cement, Bolu Cement, Mardin Cement, Ünye Cement, Denizli Cement and OYAK Concrete Industry.
In a statement on the Public Disclosure Platform (KAP), the company said that OYAK, Turkey's biggest cement producer, and the Taiwan Cement Corporation, one of the leading cement producers in the Far East, have decided to form a partnership to join forces in the international cement market. According to the agreement, OYAK Cement will retain its 60 percent share, valued at $1.6 billion, while the remaining 40 percent will be transferred to TCC for approximately $640 million.
Following the disclosure, OYAK Cement Group affiliates recorded a sharp increase in their initial transactions. Adana Cement shares opened with an increase of 5.84 percent, Bolu Cement with 11.38 percent, Mardin Cement with 5.97 percent, Ünye Cement with 14.92 percent and Aslan Cement with 0.41 percent.
While shares returned some of their gains immediately after the opening, at 10:10 Ünye Cement moved with a premium of 6.81 percent, Adana Cement with 4.56 percent, Bolu Cement with 0.67 percent, Mardin Cement with 0.6 percent, and Aslan Cement with a decline of 2 percent. The BIST-100 index stands at about minus 0.5 percent.
Reports said that the partnership was a reflection of OYAK's vision for sustainable growth and opening to the world and that they want to explore new regional and global markets with this cooperation.
OYAK General Manager Süleyman Savaş Erdem noted that this cooperation was an indicator of the confidence foreign markets have on the Turkish economy.
"We expect that the cooperation between OYAK and TCC will contribute positively to the investments to be made in cement and other businesses, in line with our growth targets in the international arena and our country's interests. OYAK will continue its path toward becoming a global brand," Erdem continued.
China's nearly saturated market is no longer meeting their strategic expectations, TCC Chairman Nelson Chang said, adding that in a strategically important country like Turkey cooperation with OYAK is a great opportunity, as well as a pioneering step for TCC's opening up to the Asian market. With a production capacity of 11 million tons in Taiwan and 65 million tons in China, TCC's a generated over $3.2 billion in revenue in 2017, the statement read. TCC, with a total of 23 factories, is one of the biggest manufacturers in China.
