Oldcastle parent consummates $7 billion Holcim (Canada), companion asset deal

Sources: CRH Plc, Dublin; CP staff

CRH has closed on a portfolio of Lafarge S.A. and Holcim Ltd. cement, concrete and aggregate production assets in 10 countries across the Americas and Europe. At a $7.2 billion enterprise value, the transaction is among the largest to date involving publicly traded, global heavy building materials companies—trailing Cemex-Rinker and HeidelbergCement-Hanson ($15 billion–$16 billion; 2007) and Lafarge-Orascom ($12 billion, 2008).

The acquired assets represent the bulk of properties Lafarge and Holcim officials agreed to unload in advance of an early-July merger forming LafargeHolcim Ltd. The assets span nearly 700 sites, approximately 10 percent of which are cement, ready mixed concrete and aggregate plants, plus 18 terminals, under or tied to Holcim (Canada) Inc. Those properties extend to the north a solid footprint Oldcastle Materials enjoys throughout Great Lakes markets in the U.S.

Globally, the transaction doubles CRH cement output; strengthens its ready mixed production profile; and, positions the company as the number two and three player, respectively, in aggregates (behind HeidelbergCement) and overall heavy building materials shipments (LafargeHolcim, Cemex).

In a nod to 15,000 colleagues joining CRH on August 3—bringing worldwide headcount just past 90,000—Chief Executive Albert Manifold noted in a statement, “With their expertise and talent on board, combined with the strength of our existing employee base, CRH is a step closer to achieving our aim of becoming the world’s leading building materials company. The businesses we are acquiring, which represent an excellent geographic fit with existing operations, are all strong performers.

“The integration of these high quality assets, which we have acquired at an attractive valuation and at the right point of the cycle, will strengthen our presence in a number of key markets as well as providing new platforms for strategic growth. The additional scale will help us to improve efficiency, speed up innovation and provide an even better service to our customers.”

Excepting Lafarge assets in the Philippines for which CRH anticipates a third quarter closing, LafargeHolcim appears to have completed in less than one month the full scope of transactions through which officials secured merger-related regulatory approvals.

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