Displaying items by tag: CRH
Mark Towe moves to CRH Americas
30 September 2015Ireland: CRH has announced that Mark Towe, currently President and Chief Executive of Oldcastle, will assume the new role of Chairman, CRH Americas. He will work with the Group Chief Executive to support performance and excellence programmes across the group. The appointment is effective from 1 January 2016. Towe will continue as an Executive Director on the Board of CRH.
CRH concludes final part of LafargeHolcim acquisition in Philippines
15 September 2015Ireland/Philippines: CRH has completed the Philippines element of its Euro6.5bn acquisition of certain Lafarge-Holcim assets and as such has now completed the entire deal.
On 2 February 2015, CRH announced that it had reached agreement to acquire certain assets from Lafarge and Holcim for a total enterprise value of Euro6.5bn. On 3 August 2015, CRH confirmed that the majority of the transaction was complete, with the exception of the operations in the Philippines. In a press release issued on 15 September 2015, CRH announced that the Philippines element of the transaction is now complete.
New CRH finance director announced
09 September 2015Ireland: Senan Murphy, currently chief operating officer at the Bank of Ireland, has been appointed as group finance director at CRH, according to The Irish Examiner.
Murphy will take up his new role, as well as joining the CRH board, in January 2015. He will succeed Maeve Carton in the finance director role, who has been in that position since 2010. Carton will move to a newly-created wider role with the title of group transformation director. There, she will be charged with better integrating CRH's businesses, identifying operational and financial opportunities and cash generation opportunities.
Ireland: CRH CEO Albert Manifold has said that the company will now take a pause from large-scale acquisitions following the completion of its US$7.3bn acquisition of various Lafarge and Holcim assets and its recent US$1.3bn acquisition of glazing products producer C R Laurence. Manifold was quoted by the Wall Street Journal as saying that significant acquisitions going forward are 'unlikely,' and that the company will focus on integrating its two big acquisitions over the next 12 - 18 months.
CRH had previously been linked with two other large-scale cement industry acquisitions. In India, it was in the running to acquire 5Mt/yr of Lafarge assets that have since been sold to Birla Group. Meanwhile, in South Korea CRH had been linked with the wholesale acquisition of Tongyang Cement & Energy. Due to Manifold's announcement, it appears that the South Korean deal is no longer on the table.
CRH first half results show increase in sales and earnings
27 August 2015Ireland: CRH has reported improved results for the first half of 2015. It reported that sales increased by 13% year-on-year to Euro9.4bn over its global operations. Although sales fell by 1% in Europe, they rose by 32% in the Americas. Earnings before interest, tax, depreciation and amortisation (EBITDA) from continuing operations were up by 29% globally, by 4% in Europe and by 57% in the Americas. CRH's profit before tax was Euro63m, a 3% improvement on its Euro61m pre-tax profit it made in the first half of 2014.
CRH reported that the acquisition of assets from Lafarge and Holcim were now fully integrated into CRH. It has also announced a further Euro1.15bn acquisition of US-based glass manufacturer C R Lawrence.
"We are on track to deliver another year of growth in 2015," said Albert Manifold, CEO of CRH. "Trading in the Americas has been good and, against a mixed macro-economic backdrop, underlying trading in Europe is broadly in line. We have made good progress towards achieving our goal of restoring margins and returns to peak over the cycle, with further margin improvement in each operating division. We are now applying CRH rigour to (our) new businesses to integrate them efficiently and to drive performance."
Philippines: Aboitiz Equity Ventures Inc, a Philippine investment holding company, has signed a US$400m loan to help fund the acquisition of the Philippine assets and business of cement maker Lafarge SA. The loan is being provided by The Bank of Tokyo-Mitsubishi UFJ Ltd.
Aboitiz Equity signed a deal with CRH in May 2015 to allow it to join the Irish building materials company in buying Lafarge's cement plants in the Philippines. CRH earlier agreed to buy the assets as part of Lafarge and Holcim assets that were due to be sold off prior to the formation of LafargeHolcim. Aboitiz Equity had said the investment is part of efforts to expand in infrastructure development.
Mergers and acquisitions aplenty… but what about Cemex?
19 August 2015In early 2014 the top of the global cement producer charts looked very different to how it does today. The big four multinationals, Lafarge, Holcim, HeidelbergCement and Cemex, were clearly out in front and ahead of the rest of the global top 10. While there was discrepancy in their sizes, the largest, Lafarge (224Mt/yr) had just over twice the cement capacity of fourth-placed Cemex (95Mt/yr), with Holcim (218Mt/yr) and HeidelbergCement (122Mt/yr) between these extremes.1 With an impressive 659Mt/yr of capacity between them, these four accounted for just shy of half of global cement capacity outside of China.
However, as those with even a passing interest in the cement sector will know, this is no longer the case. The merger between Lafarge and Holcim and the subsequent acquisition of Italcementi by HeidelbergCement has stretched out the range of the top producers significantly. Today LafargeHolcim has around 340Mt/yr of installed capacity and HeidelbergCement 200Mt/yr. Meanwhile Cemex is still 'stuck in the 90s,' with a capacity of around 92Mt/yr following the sale of its Croatian cement assets last week. The Mexican 'giant' is now almost a quarter of the size of LafargeHolcim. What does this mean for the world's number three (excluding Chinese producers) and what might the future hold?
Well... the old adage goes that you have to move forward to stand still. However, Cemex has not moved forward over the past two years, meaning that is hasn't kept up the pace with its immediate rivals. It hasn't been able to, hemmed in by the debt that it took on from its poorly-timed acquisition of Rinker in 2007. Indeed, Cemex is looking to contract further, with aims to shed a further Euro600 - 1100m of non-core assets in 2015.2 Against improved positions at LafargeHolcim and HeidelbergCement, Cemex increasingly looks like an 'Americas specialist' rather than a full-blown multinational. A stake in Cemex LatAm Holdings is up for sale, but the sale of more cement plants may also be on the way. This is all being done to improve Cemex's investment grade rating from B-plus, four grades below investment grade.
If Cemex does have to shed further physical assets on the ground, it is very unlikely that it would chose to do so in the Americas, where it is a very major player. It is number one in Mexico, third in the US and well-postitioned in numerous growth markets in Central America. If push comes to shove, it is far more likely that it would sell assets that are further from home. These are in Europe, the Middle East and the Far East.
Cemex has 43% of its production capacity outside the Americas. Certain assets, such as those in Thailand, Bangladesh and the Philippines, may be appealing to CRH, which is already set to acquire LafargeHolcim divestments there and is known to be considering other purchases in the region.3 Cemex also owns several cement plants in better-performing EU economies like Germany and the UK. In Germany, the company has already completed a small downsizing exercise by selling its Kollenbach plant to Holcim (LafargeHolcim). Meanwhile, Cemex UK is a major player in the UK, where the Competition Commission has recently been very keen to increase the number of producers. Elsewhere, Cemex's share in Assuit Cement in Egypt could provide much needed revenue, as could its small stake in the Emirati markets.
Thinking more radically, and in keeping with the current trend of mega-mergers and large-scale acquisitions, could Cemex find itself the target of the next global cement mega-merger / acquisition? Certainly, its strength in Central and South America completely complements HeidelbergCement's lack of coverage here, making a future 'HeidelbergCemex' a potential winner.
The other option, if/when Cemex regains its investment rating, would be for Cemex to acquire or merge with a company further down the list of global cement produers. Africa is an obvious target, with rapid growth and a lack of Cemex assets at present. A foreigner buying up Dangote is probably out of the question, but PPC would be an interesting target, as would increasingly isolated Brazilian producers that could help shore up Cemex's South American position.
If the past 18 months in the global cement industry have shown anything, it is that we should expect the unexpected. It will be very interesting to see how all players, both large and small, will react to the recent goings on in the rest of 2015 and beyond.
1. 1. Saunders A.; 'Top 75 Cement Producers,' in Global Cement Magazine – December 2013. Epsom, UK, December 2013.
1. 2. Reuters website, 'Mexico's Cemex could sell part of business to pay down debt: CEO,' 10 February 2015. http://www.reuters.com/article/2015/02/11/us-mexico-cemex-idUSKBN0LF05320150211.
1. 3. Global Cement website, 'CRH investment spend set to pass Euro7bn with South Korea cement deal,' 12 June 2015, http://www.globalcement.com/news/item/3721-crh-investment-spend-set-to-pass-euro7bn-with-south-korea-cement-deal.
Lafarge Germany becomes Opterra with CRH buyout
10 August 2015Germany: Lafarge's assets in Germany, which were recently sold to Ireland's CRH as part of the LafargeHolcim merger, have been rebranded by CRH as 'Opterra.' The assets include two integrated cement plants and one grinding plant.
CRH completes LafargeHolcim acquisition
03 August 2015Ireland: On 2 February 2015, CRH announced that it had reached an agreement to acquire certain assets from Lafarge and Holcim for Euro6.5bn. The deal has now been completed, with the exception of the Philippines, which is expected to close in the third quarter of 2015.
"Today we extend a warm welcome to 15,000 new colleagues joining CRH. With their expertise and talent on board, combined with the strength of our existing employee base, CRH is a step closer to achieving our aim of becoming the world's leading building materials company. The businesses we are acquiring, which represent an excellent geographic fit with CRH's existing operations, are all strong performers in their respective areas. The integration of these high quality assets, which we have acquired at an attractive valuation and at the right point of the cycle, will strengthen our presence in a number of key markets as well as providing new platforms for strategic growth. The additional scale will help us to improve efficiency, speed up innovation and provide an even better service to our customers," said Albert Manifold, CRH chief executive.
The transaction more than doubles CRH's cement production volumes and will further expand its aggregates and ready-mixed concrete portfolios. The acquired assets consist of more than 685 locations in 11 countries and include:
- The largest cement producer in central Canada; an excellent fit with CRH's existing Americas Materials business;
- Major cement and aggregates operations in western Europe's three largest markets: The UK, France and Germany;
- Leading cement and aggregates companies in the growth regions of central and eastern Europe, creating a strong regional cluster in which CRH becomes the number one heavy-side building materials company;
- Entry positions of scale in two emerging economic regions; Brazil and the Philippines.
With the closure, Tarmac and Blue Circle come together to form Tarmac, under the new ownership of CRH, according to Agg-Net. The company's new branding combines the heritage and innovation associated with the Tarmac name and the unique identity of the Blue Circle logo. The newly combined business is now the market leader in aggregates, asphalt, contracting services, lime and powders and is a leading player nationwide in cement, concrete and other building products.
"This is an exciting evolution for our business. With our new owner CRH in place to support the ongoing development and delivery of our strategic vision, we're in an exceptionally strong position to deliver our growth ambitions and continue creating value for our customers, our shareholders and our employees," said Tarmac's CEO, Cyrille Ragoucy, said. Tarmac has confirmed that there will be no change to its relationships with customers, suppliers and other stakeholders.
High Court overturns rulings against CRH in Goode case
03 August 2015Ireland: The Supreme Court has overturned rulings made by a High Court judge in proceedings by Goode Concrete against CRH on grounds of alleged objective bias arising from the judge holding some Euro135,000 in CRH shares, according to The Irish Times.
Chief Justice Susan Denham said that, if the judges held shares directly in a company involved in litigation before them, as opposed to shares held in a pension plan or unit fund over which they have no control, they should 'generally' not hear the action. The disputed rulings, all unfavourable to the Goode side, were made between 2010 and 2012 by Justice John Cooke, who has since retired, on pre-trial matters in Goode Concrete's action over alleged uncompetitive practices by CRH. The issues will now be reheard before a different High Court judge.
By a four-to-one majority, the Supreme Court granted Goode's appeals against the rulings after finding that Justice Cooke erred in law in hearing the applications due to reasonable apprehension of objective bias due to his CRH shareholding. Justice Cooke held the shares himself; they were not in a trust or any other type of fund.