CRH shares up on Ash Grove acquisition news
Shares in building materials group CRH have risen 2.5pc this morning after it’s bid to purchase Ash Grove Cement for $3.5bn (€2.94bn) was approved by Ash Grove shareholders.
The company’s bid for Ash Grove had hit a stumbling block after the emergence of an 11th-hour bidder for the Kansas-headquartered company.
Following the third-party bid from Summit Materials, Ash Grove, which is the fifth largest cement producer in the US, extended the period for obtaining shareholder approval for the CRH transaction in order to fully evaluate the third-party bid.
However the failure of the third-party bidder to post a definitive offer means that CRH will acquire Ash Grove Cement for the original price of $3.5bn.
The deal is strategically important for CRH as it reduces the group’s dependence on third-party producers and catapults Ireland's largest company into the top three cement producers in North America.
Earlier this year CRH announced the sale of its US distribution business, Allied Building Products, for $2.63bn (€2.2bn) to Beacon Roofing Supply.
At the same time the company said that it was buying German lime and aggregates producer Fels for €600m.
The US business was being sold at a multiple of 16 times earnings compared to the seven times earnings, post synergies, that CRH was paying for its German acquisition.