Lafarge Holcim today officially announced it has signed an agreement with Siam City Cement Public Company Limited for the divestment of its interest in Holcim Lanka for an enterprise value of US$ 400 million.

Holcim Lanka operates one integrated plant and one grinding plant and is the country’s leading cement manufacturer. The proceeds from the sale of the divestment business will be used to further reduce debt.

“Following the agreement earlier this month for the divestment of Lafarge India to Nirma Limited, this is a further step for Lafarge Holcim towards reaching its CHF 3.5 billion divestment target for 2016. The Group has now secured three-quarters of the program,” the firm said in a statement.

The statement added that closing of the transaction in Sri Lanka is however expected in the third quarter of this year.

Commenting on the takeover, SCCC said that the deal will give it the largest share of the cement market in Sri Lanka, diversify its revenue sources and provide an opportunity to expand in South Asia.

“The acquisition, expected to be completed in the next two weeks, will be made via SCCC‘s wholly unit unit INSEE Cement Holdings Co, which will buy the 98.95 per cent stake in Holcim (Lanka) Ltd, including its subsidiaries,” the statement noted.

SCCC, controlled by Thailand’s Ratanarak family, will use one-year credit facilities from Bank of Tokyo-Mitsubishi UFJ to finance the purchase, the firm said.

Holcim (Lanka) operates a fully integrated cement plant with an annual capacity of about 1.3 million tonnes in Puttalam. The company also operates a cement grinding facility in Galle with annual capacity of about 1 million tonnes and manages three terminals with packing capacities in three local ports with total import capacity of 1.6 million tonnes.

With a well-balanced presence in 90 countries and a focus on cement, aggregates and concrete, Lafarge Holcim is the world leader in the building materials industry. The Group has 100,000 employees around the world and combined net sales of CHF 29.5 billion in 2015.