In an early-February U.S. Securities and Exchange Commission filing, CRH Plc confirmed a binding commitment to acquire certain assets Switzerland’s Holcim Ltd. and Paris-based Lafarge SA had bundled for sale, thereby advancing a merger the producers hope to consummate by mid-year. The commitment centers on a transaction with an enterprise value of about $7.4 billion, and encompasses Holcim Canada Inc. plus a host of overseas cement, concrete and aggregate businesses.
Dublin-based CRH offered limited guidance on how the Lafarge and Holcim asset transaction affects its North American business, Oldcastle Inc. The concrete, cement and aggregate operations of Holcim Canada, however, would extend the Oldcastle Materials footprint beyond the U.S., and perhaps offer limited synergies with Oldcastle Products businesses in Ontario and Quebec.
The European Commission announced late last year approval of the proposed merger forming LafargeHolcim. It stipulated divestment of Lafarge businesses in Germany, Romania and the United Kingdom, and Holcim operations in Czech Republic, France, Hungary, Slovakia and Spain. In addition to Canada, remaining countries where Lafarge and Holcim have listed assets for disposal—and regulator approval appears pending—are Brazil, Mauritius and the Philippines.
Upon their initial merger announcement in April 2014, Lafarge and Holcim indicated divestments would involve assets representing up to $7 billion in sales. The merger calls for a 1:1 share exchange and a management team comprising equal representation from both companies. As the world’s largest heavy building materials operator, LafargeHolcim would have operations in 90 countries, annual sales exceeding $40 billion; 470 million and 384 million tons of cement and aggregate shipments, respectively; plus, 90 million yd. of ready mixed production.
BAIN BOUND: GLEN GERY, BRICK BRANDS
CRH Plc will sell its Ibstock and Glen-Gery businesses in the U.K. and U.S., respectively, in a $640 million deal with funds managed by Bain Capital Europe LLP. Projected to close during the first half of 2015, the transaction includes assumption of certain debt and pension liabilities resulting in net cash value to CRH of approximately $457 million.
Beyond Glen-Gery and Ibstock flagship properties, the deal includes U.K. concrete products companies Forticrete and Supreme Concrete. In the U.S., Wyomissing, Pa.-based Glen-Gery has been part of the Oldcastle Inc. portfolio for 25-plus years and, within Oldcastle Building Products, a clay unit masonry companion to a much larger concrete and stone veneer business anchored by the Belgard brand. Glen-Gery has nine clay brick plants across Pennsylvania, Ohio, Virginia, Kentucky and Iowa, plus 11 sales centers or yards serving Mid-Atlantic to Kansas City markets.