Saturday 22 September 2018

CRH faces rivals in hunt for South African asset

CRH CEO Albert Manifold
CRH CEO Albert Manifold

Loni Prinsloo and Aaron Kirchfeld

Ireland's CRH is among companies considering a counterbid for PPC that could trump an offer by Canada's Fairfax, according to sources, adding a potential new twist to the battle for South Africa's largest cement-maker.

The Irish building-materials supplier has held early deliberations about pursuing an acquisition of the Johannesburg-based company, said the people, who asked not to be identified as the plans aren't public.

A final decision hasn't been made and the company may decide against an offer in favour of US acquisitions, the people said. PPC has a market value of SAR11bn (€690m).

A CRH bid for PPC would open a new front for the Irish company, headed by CEO Albert Manifold, that has emerged as a consolidator in the global building-materials industry.

CRH agreed last month to take over Ash Grove Cement of the US for $3.5bn, but earlier this week Denver-based construction supplier Summit Materials made a rival bid.

Issues yet to be settled include how the Dublin-based company would address the requirement of a black economic empowerment deal, a way to comply with South African government initiatives to redistribute wealth to those discriminated against during apartheid, one of the people said.

The takeover would also likely require support from state-owned Public Investment Corp, Africa's biggest money manager and a top shareholder in PPC.Spokespeople for CRH and PPC declined to comment.

PPC's future as an independent company has been clouded for months after talks about a tie-up with rival AfriSam Group failed and Toronto-based insurer Fairfax made a partial offer for SAR2bn rand of PPC stock at SAR5.75 a share.

Fairfax's offer is conditional on PPC merging with AfriSam, and the South African company has appointed Investec to review the proposal.

Dangote Cement, Nigeria's biggest company, considered making a counteroffer but withdrew its interest last week.

PPC said on October 3 it had received two "credible indicative proposals" as well as the Fairfax offer, one of which was from Dangote. It didn't identify the third potential bidder.

CRH is just one of a number of parties considering whether to bid for PPC, one of the people said. Bloomberg News reported in September that LafargeHolcim, HeidelbergCement and Titan Cement of Greece were also in the mix. (Bloomberg)

Irish Independent

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