Business Irish

Monday 11 December 2017

CRH tipped to buy up Indian rival

CRH is set to acquire Indian cement company Sree JayaJothi, the 'Economic Times' of India reported yesterday.

Sree JayaJothi is the cement-making arm of the $9bn (€6.8bn) Shriram Group.

CRH has flourished thanks to small bolt-on acquisitions such as this. Over the past 42 years, it has grown from a small, mainly Irish-based cement and aggregates producer to being one of the world's largest building materials companies, with 2012 sales of €18.6bn and operating profits of €845m.

"The deal is likely to be announced shortly. CRH is set to purchase the target through its joint venture with MyHome Industries Ltd," a source told the Indian newspaper.

Sree JayaJothi has a cement manufacturing facility at Kurnool, Andhra Pradesh, with a combined clinkerisation capacity of two million tons per annum and cement-grinding capacity of 3.2 million tons per annum, the newspaper added. The location will provide cost benefits to CRH and is close to the Bangalore market.

"There is a lot of interest from both strategic and financial investors in the cement sector. However, high valuation expectations of the Indian promoters are a hurdle for any sizeable deal to happen," the newspaper quoted analyst Anil Khatri as saying.

"The Shriram EPC deal may turn out to be an ice-breaker."

Irish Independent

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