CRH cements €6.5bn deal for Holcim-Lafarge assets

CRH said the purchased operations are “highly complementary” and are expected to make it the “global number-three building materials player”.

After confirming it had held discussions last month, CRH has now signed a binding agreement with the Swiss and French groups. The FTSE 100-listed company fought off competition from a number of large private-equity players such as Blackstone in an auction for the assets.

The acquisition will be financed by a combination of €2bn of existing cash on CRH’s balance sheet, bank facilities and the proceeds of an equity placing of 9.99% of the company’s current issued share capital.

The assets, which include cement, aggregates, ready-mix and related construction activities, are located in North America, Western Europe, Central & Eastern Europe and various emerging markets. They generated €5.1bn of revenues and €752m of operations profits in 20133.

After the first full year of ownership, the assets should be 25% accretive to CRH’s underlying earnings. CRH also expects €90m of annual net synergies from the deal from year three.

"This transaction represents a significant value creation opportunity for CRH,” said chief executive Albert Manifold.

“We are acquiring a quality portfolio of assets, which complement our existing positions, at an attractive valuation and at the right point of the cycle.”

Completion of the deal is expected in mid-2015.