Business Irish

Thursday 26 April 2018

CRH 'in talks' on takeover of €1.3bn India cement plants

Peter Flanagan

Peter Flanagan

CRH is said to be in discussions to buy two cement plants in India in a deal which could be worth hundreds of millions of euro.

The construction materials conglomerate, which makes up more than a third of the value of the Irish Stock Exchange, was reported to be in talks exploring the possibility of buying the plants, which are owned by the Indian conglomerate Jaiprakash Associates.

The plants are located in Gujarat and Andhra Pradesh, in western and southern India.

Press reports in India suggested a deal for the two plants could cost as much as €1.3bn.

A number of firms are said to be interested in the factories, however, and last night industry sources played down CRH's link to the deal, describing the reports as "overblown".

While CRH has investigated buying the two plants, talks are not believed to be at an advanced stage. The assets are known to have been on the market for some time, and market watchers indicated the reports in India may have been a ploy to smoke out interest from other parties.

If the Irish company were to buy the two plants, it would be a change from the company's recent strategy of smaller, bolt- on acquisitions.

The firm completed at least 16 such deals between April and June, according to NCB Corporate Finance.

An India deal would, however, match the conglomerate's pattern of expansion when it moves into a new country. Usually it will move into the cement business in a new jurisdiction as part of a joint venture before completing a major deal further down the line. In 2008 CRH took a 50pc share in Hyderabad-based cement producer My Home Industries.

A spokesman said the company did not comment on market speculation.

Davy Stockbrokers' analyst Robert Gardiner said: "An acquisition of this nature could potentially make sense given its existing presence in Andhra Pradesh and its stated intention to expand in the country.

''A combined purchase with the group's existing partner, MyHome Industries, cannot therefore be entirely ruled out. However, any deal would have to stack up financially and the rumoured purchase prices, at $160 (€130) per ton of cement, looks rich."

CRH fell 0.7pc in Dublin to €15.35.

Irish Independent

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