CRH eyeing $1bn US acquisition as €6.5bn Lafarge-Holcim deal nears
CRH is sizing up a potential $1bn (€887m) deal in the United States and a €700m acquisition in Europe as it waits to complete the €6.5bn purchase of assets from Lafarge-Holcim, according to chief executive Albert Manifold.
Holcim shareholders will vote in Zurich this morning as the company seeks approval for its merger with French giant Lafarge, which held its annual general meeting yesterday.
CRH is planning to buy assets the two rivals are offloading as part of a deal with competition tsars to ensure the transaction is approved.
Holcim shareholders are expected to back the merger with Lafarge, enabling CRH to complete its €6.5bn in purchases and significantly expand its operational footprint.
CRH is buying assets in regions such as Europe, Canada, Brazil and the Philippines.
CRH - Ireland's biggest company - will be propelled from being the world's fifth largest building materials company to being the third largest, just slightly behind French group Saint Gobain.
"It's up to the Holcim shareholders," said Mr Manifold after CRH's annual general meeting yesterday regarding today's vote in Switzerland. "All the signals that we see externally are positive." He confirmed that CRH is also looking at two other big potential deals, but cautioned that there's no certainty they'll proceed.
"We probably do about one in 10 deals that come onto our table. Most times we don't do deals because we don't see the value when we do further in-depth analysis."
Mr Manifold said the pipeline of potential deals is "quite strong" for CRH at the moment.
CRH has also sold roughly half the businesses it planned to under a multi-year divestment programme that only began last year.
"We did say we'd give ourselves three to five years," said Mr Manifold. "Some of the businesses that are easy to sell we've held back because they're in improving areas. I'd like to see them enjoy a bit of profit growth before I'd send them back to the marketplace."
Mr Manifold also confirmed that CRH has hired global agency Interbrand, a unit of Omnicom, to advise CRH in relation to the new companies it is acquiring under the Lafarge-Holcim deal.
CRH typically retains the names of the companies it buys, but Mr Manifold said it wants to assess how best to proceed with the firms it will acquire under the transaction.