Thai SCC buys stake in Indonesia's Chandra Asri for $442 mln

* SCC will hold 30 pct in Chandra Asri

* Acquisition is growth opportunity in Indonesia

* SCC shares unchanged in weak market 

Thailand's Siam Cement Pcl said on Tuesday it planned to buy a 30 percent stake in Indonesia's Chandra Asri Petrochemical Tbk (CAP) for 13.5 billion baht ($442 million) as part of its Southeast Asian expansion drive. 

CAP, Indonesia's largest petrochemical maker, is one of two Indonesian companies sought by Siam Cement, Thailand's biggest industrial conglomerate. The other is Sulfindo Adiusaha, a chemical producer controlled by Indonesia's Tanojo family. 

The deal is yet another indicator of increasing foreign interest in Southeast Asia's biggest economy, which is drawing investors because of strong growth and a buoyant stock market.

Siam's wholly-owned unit, SCG Chemicals Co Ltd, has signed agreements to acquire 218.52 million CAP shares from PT Barito Pacific Tbk and another 701.34 million CAP shares from Apleton Investments Ltd, it said in a statement to the stock exchange. 

"This investment represents a unique opportunity for SCG Chemicals to invest in Indonesia's leading petrochemical franchise, with highly attractive market growth dynamics," Chief Financial Officer Chaovalit Ekabut said in the statement. 

The transaction is expected to be completed this month and Barito will remain the controlling shareholder of CAP, it said. 

HSBC, exclusive financial advisor to Siam Cement for the transaction, said in a statement SCG Chemicals will become a non-controlling shareholder in Chandra Asri.

Another contender is Thailand's PTT group. Sources recently said PTT group was keen to acquire a stake in CAP. Singapore state investor Temasek Holdings Pte Ltd has been trying to unload its 23 percent stake.

With 2010 sales of $1.86 billion, CAP makes polyethylene, polypropylene, styrene monomer and various olefins products. Its plants are located in Cilegon, a major coastal industrial city in the province of Banten, West Java, Indonesia.

"We belive that the acquisition of CAP will be positive for SCC given that it is producing the same products," Naphat Chantaraserekul, analyst at DBS Vickers Securities, said in a recent note to clients. 

Siam Cement, 30-percent owned by the Thai royal family's Crown Property Bureau, has aggressively scouted for opportunities for assets overseas, especially in Southeast Asia.

The company already has interests in petrochemical plants in Indonesia and its subsidiary, Thai Plastic Chemicals Pcl , has a polyvinyl chloride (PVC) plant in the country with a capacity of 120,000 tonne a year. 

Siam Cement focuses on three core businesses: cement, petrochemicals, paper and packaging. Petrochemicals generally make up almost half of profits.

Valued at $12 billion, Siam Cement had cash of about 58 billion baht ($1.9 billion) at the end of June.

The conglomerate also had planned to build a $3.5-4.0 billion petrochemical complex in Vietnam, but the project has been delayed since 2009. Siam Cement has said it expected to conclude a plan for the project in Vietnam by mid-2011.

At 0315 GMT, Siam Cement shares were unchanged at 303 baht, while the broad market was 0.5 percent lower. ($1 = 30.50 Baht. Source: Reuters