Holcim gauges cement, aggregate asset traction on Wall Street

Sources: CP staff; Holcim Ltd., Zug, Switzerland

The Holcim Ltd. announcement of a plan to spin off its U.S. and Canadian operations into a separate, publicly traded entity coincides with investor interest in construction materials production assets at its highest level in generations. A business encompassing Holcim North America holdings is poised to emerge on the heels of record or near-record valuations for New York Stock Exchange-traded peers with major or sizable stakes in U.S. and Canadian cement, aggregates and concrete markets: Arcosa Inc., CRH Plc, Eagle Materials, Knife River Corp., Martin Marietta Materials, Summit Materials and Vulcan Materials.

Arcosa and Knife River are the products of 2018 and 2023 spin offs from Trinity Industries and MDU Resources Group. Over a five-year window, Arcosa shares climbed from $31 to a $78-82 range in late-2023 and early-2024 trading. Knife River shares have gained from a June premier of $36 to a $63-$67 range since late 2023. In mid-January, Summit Materials completed a merger with Argos North America, significantly raising its stakes in U.S. cement and ready mixed concrete production. Its stock has remained near record territory in the company’s 13-year history of NYSE listing, even with the issuance of 31 million new shares to Cementos Argos S.A. as part of the merger agreement.

In their February 2023 announcement of a proposed primary listing move from the London Stock Exchange to the New York Stock Exchange, CRH officials cited the prospects for increased commercial, operational and acquisition opportunities and “delivering even higher levels of profitability, returns and cash for shareholders.” CRH shares have gained about 20 percent since their September 2023 NYSE debut.

The most compelling case for a separately listed entity of Holcim operations in the U.S. and Canada can be made with investor sentiments surrounding Eagle Materials, Martin Marietta Materials and Vulcan Materials, whose cement and aggregate production portfolios have exhibited higher earnings one quarter after another. While all three producers comfortably weathered 2020-21 pandemic disruptions, their appeal to investors is especially indicated in valuations maintained or extended since the Infrastructure Investment and Jobs Act was signed in November 2021. Over the past 25 months, each has closed most trading days with share prices hovering or up to 20 percent higher than pre-IIJA record levels.