Displaying items by tag: Ireland
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.
Ireland: Ireland's competition watchdog will go to the High Court in July 2015 as part of its probe into alleged anti-competitive practices in the cement industry.
In May 2015, the Competition and Consumer Protection Commission (CCPC) seized thousands of documents when it raided the offices of Irish Cement, a subsidiary of CRH, Ireland's largest listed company. It also visited the offices of several other companies. The CCPC will ask the court in July 2015 to rule on which of the documents seized it is allowed use to build its case, as some of the material could constitute privileged information, such as legal advice. The watchdog has launched an investigation into whether Irish Cement has abused its dominant position in the market, which the company denies.
The commission has confirmed that it seeks High Court approval to filter the material it seized from the CRH subsidiary. "When it conducts such searches, the commission is entitled to compel the target business to disclose information to it even if the target claims that the information in question contains legally privileged material," said the CCPC. The commission said it had, "Made an application to the High Court seeking a determination as to whether certain information seized from Irish Cement during the search operation on 14 May 2015 constitutes legally privileged material." The CCPC is obliged to keep the information confidential until it gets such a determination. It is understood that the documents seized have not yet been handed over to the investigating team, pending the High Court determination.
Irish Cement has previously stated that it fully-facilitated the 'raid' on its premises and is cooperating fully with the CCPC investigation. The commission's investigation is focused on the Euro50m/yr bagged-cement sector. The commission has stressed that the investigation could take some time to complete before any further legal action, if any, is taken.
The CCPC stressed that next month's planned court hearing is simply to help it filter out Irish Cement's legal advice and does not mean that it has decided to prosecute. "For the avoidance of doubt, the commission has not instituted High Court proceedings against Irish Cement for any breach of competition law," it said.
Ireland/South Korea: CRH's investment spend for 2015 looks set to surpass Euro7bn, with the company heavily linked with a Euro800m move for the number two player in South Korea's cement market, Tongyang Cement & Energy. Tongyang Cement & Energy has a market value of nearly Euro600m. Its owner is reportedly putting a 74% stake on the market, with a Euro800m price tag being touted.
CRH's Euro6.5bn purchase of assets being offloaded as part of the merger between Holcim and Lafarge is due to conclude in August 2015. CRH is set to become the third-largest building materials business in the world on the back of that deal, but management has already suggested that it won't be the limit of its 2015 spending. CRH chief executive Albert Manifold said that the group had a 'very strong' acquisition pipeline.
CRH spent Euro45m in the first four months of 2015. Manifold said that CRH currently has a separate Euro1bn US deal under consideration and a Euro700m deal, but noted that CRH typically concludes around 10% of the deals that come onto its radar. However, if all of those deals came to pass, CRH's 2015 investments would exceed Euro8bn.
While the Euro700m deal is thought to be a European target, if the Korean deal goes ahead, it would further boost CRH's Asian presence, which is already being improved via new assets in the Philippines coming on stream via the LafargeHolcim deal. CRH said that it would repackage its Asian operations into a separate grouped entity in 2015 to cater for its growing size. The South Korean market consumes about 45Mt/yr of cement from a total production capacity of around 65Mt/yr.
Ireland: Quinn Cement Limited has been fined Euro2000 plus costs after the company pleaded guilty to failing to control dust emissions from its plant in Ballyconnell, County Cavan.
Reports of at least three houses and cars in the nearby area being coated in a film of cement dust were made to the Environmental Protection Agency (EPA) after a filter bag failed at the plant on 5 – 8 September 2014. An inspector from the EPA subsequently visited the area and took statements from complainants, including an asthmatic who had raised fears in relation to the health impact the dust might have.
At Cavan District Court on 21 May 2015, the court heard how the plant was shut down while the fault was found and rectified. A number of fail-safes have since been employed at the Ballyconnell plant safeguarding against such an occurrence arising again. Judge McLoughlin convicted and fined Quinn Cement Euro2000 on one count of failure to control dust associated with activity, which resulted in an impairment of or an interference to amenities or the environment beyond the installation boundary, subject to licence. A second count was struck out on the agreement that the company also pay costs incurred by the EPA in carrying out its investigation of Euro5570.
CRH faces competition probe on home turf
20 May 2015CRH's ambitions took a setback this week when the Irish Competition and Consumer Protection Commission (CCPC) raided the offices of its subsidiary Irish Cement as part of an investigation into the bagged-cement industry in Ireland. Details are vague but the media reports state that the inquiry is examining whether or not the Irish market leader has abused its dominant position in the market, valued at Euro50m/yr.
Undoubtedly CRH and Irish Cement hold a leading place in the local cement industry. Irish Cement runs two integrated cement plants in the Republic with a combined production capacity of 2.7Mt/yr. This constitutes 79% of the country's 3.4t/yr total capacity.
Previous acquisition activity such as CRH's purchase of Dudman Group's UK import terminals in July 2013 has led to concerns regarding market competition. At that time Irish cement importer Eircem complained to the UK Competition Commission (CC), claiming that 'there is no free competition' in the market and also to initiate proceedings against CRH for damages relating to alleged anti-competitive behaviour in that market.
Roll the clock forward nearly two years and CRH is making the headlines once more for a much larger acquisition portfolio: the purchase of the largest chunk of assets sold from the merger of Lafarge and Hocim. With regards to Ireland and the UK, CRH will take on three (Dunbar, Tunstead and Aberthaw) of Lafarge Tarmac's five cement plants. Lafarge Tarmac's other two plants (Cookstown and Cauldon) will become part of the Aggregate Industries division of Lafarge Holcim. And once again, following acquisition activity competition, questions are looming as the CCPC raid suggests. This time though the potential impact of any market abuse, if it is actually happening, is far larger given the influx of UK and European assets that CRH are taking on.
We don't know what the CCPC will find but we can look at how CRH was viewed in the UK CC report on 'Aggregates, cement and ready-mix concrete market investigation' published in January 2014. At that time the CC concluded that, "We have seen nothing to suggest... that the recent acquisitions by CRH will result in importers collectively or individually offering a significantly greater constraint on cement producers than in the past." Amusingly though CRH also told the CC that it had no major expansion plants for the UK.
We also know how one of CRH's competitors felt about them. One of the more telling quotations from the CC report was from a Commercial Manager, at Lafarge Cement Ireland who viewed expansion in Ireland by Lafarge as a 'mechanism' to control CRH's ambitions by attacking it in its home market by showing CRH that Lafarge was a global player. Ironically the comments of that anonymous manager look very different now that CRH is on track to becoming a global player itself.
Ireland: Gardaí (Ireland's police force) and officials from the Competition and Consumer Protection Commission (CCPC) raided Irish Cement's offices last week in an investigation into the Euro50m bagged-cement industry. According to local media, the inquiry is focused on charges of abuse of a dominant position, which is an offence under both Irish and European law.
The alleged offence involves a business using a powerful position in a particular market to force out rivals or put them out of business. It often involves predatory pricing, namely cutting charges for products or services to a point where others cannot compete. Irish Cement is one of the largest players in the market.
"Irish Cement fully facilitated the inspection and is continuing to cooperate with the CCPC. Inspections regarding competition policies, procedures and practices are an accepted part of the business environment around the world," said Irish Cement in a statement. The company added that it operated to the highest standard and was confident that it had no issues in relation to competition.
CRH forecasts earnings growth of 10%
07 May 2015Ireland: CRH has forecast earnings growth of close to 10% for the first half of the year as it reported 'modest growth' in Ireland.
CRH said that group sales for the first four months of 2015 rose by 2.5% compared with the same period of 2014. The strong performance was largely driven by positive momentum in the Americas, where the economic and business environment remained upbeat. Sales in the US rose by 8% as CRH benefited from improving construction activity. In Europe, trends are improving across CRH's main markets, but sales fell by 2%. In Ukraine, CRH said that the markets were resilient despite the political instability, but that cement volumes were below the prior year. CRH reported a 'continued recovery in market conditions' in Ireland and said that it was 'well-positioned to benefit from modest growth.'
Looking to the first six months of 2015, CRH said that it expected earnings to be 'close to 10% ahead of last year on a constant currency basis' and predicted further progress in the second half of the year with earnings again ahead of 2014. These forecasts do not take into consideration the impact of CRH's proposed acquisition of certain assets from Lafarge and Holcim for Euro6.5bn.
CRH disposed of assets worth Euro540m in the first four months of 2015, bringing total proceeds from its divestment programme to Euro900m since its inception in August 2014. CRH said that its cost-reduction programme remained on track to deliver a further Euro75m of savings in 2015, which would bring cumulative (2007 - 2015) savings to Euro2.6bn.
CRH appoints new Transformation Director
29 April 2015Ireland: CRH has said that its Group Finance Director - Maeve Carton - will become the company's new Group Transformation Director. The position is a new strategic group function within the company and Carton's new role will start in January 2016.
As Group Transformation Director, she will identify and implement the optimum financial and business model for the group in the years ahead. She will report to, and work closely with CRH's Group CEO Albert Manifold, and will continue to contribute directly to the board as an executive director.
The building materials group said that a search to appoint a new finance director for the group will start shortly. It is hoped that this process will be completed by the end of the year. Carton will continue as finance director until her replacement has been appointed, which will ensure an "effective transition process".
Ireland: CRH is paying Euro700m 'over the odds' for a Euro6.5bn acquisition that would make it the world's third-biggest building materials supplier, according to a report from US-based AllianceBernstein (AB), a global asset management company.
CRH has agreed to buy a number of mostly European assets from Lafarge and Holcim for Euro6.5bn so the merging companies can get competition clearance for their plan to create the cement industry's biggest company. However, AB has raised doubts about the value of the deal for CRH. The move was also was overwhelmingly approved by shareholders at a recent extraordinary general meeting.
In a detailed report into the deal, AB said that the move represented "A step in the wrong direction for CRH. The acquisition price of Euro6.5bn is 12% above our Euro5.8bn estimate of the fair value of the assets."