CRH may buy ce­ment com­pany

The Irish Times - Business - - MARKETS -

CRH is among com­pa­nies con­sid­er­ing a coun­ter­bid for PPC that could trump an of­fer by Canada’s Fair­fax Fi­nan­cial Hold­ings, ac­cord­ing to peo­ple fa­mil­iar with the mat­ter, adding a po­ten­tial new twist to the bat­tle for South Africa’s largest ce­ment maker.

The Ir­ish build­ing-ma­te­ri­als sup­plier has held early de­lib­er­a­tions about pur­su­ing an ac­qui­si­tion of the Jo­han­nes­burg-based com­pany, said the peo­ple, who asked not to be iden­ti­fied as the plans aren’t pub­lic.

A fi­nal de­ci­sion hasn’t been made and the com­pany may de­cide against an of­fer in favour of US ac­qui­si­tions, the peo­ple said. PPC has a mar­ket value of 11 bil­lion rand (€689 mil­lion).

Is­sues yet to be set­tled in­clude how the Dublin-based com­pany would ad­dress the re­quire­ment of a black eco­nomic em­pow­er­ment deal, a way to com­ply with South African gov­ern­ment ini­tia­tives to re­dis­tribute wealth to those dis­crim­i­nated against dur­ing apartheid, one of the peo­ple said.

The takeover would also likely re­quire sup­port from state-owned Pub­lic In­vest­ment Corp, Africa’s big­gest money man­ager and a top share­holder in PPC. Spokes­men for CRH and PPC de­clined to com­ment.

PPC’s fu­ture as an in­de­pen­dent com­pany has been clouded for months af­ter talks about a tie-up with ri­val AfriSam Group failed and Toronto-based in­surer Fair­fax made a par­tial of­fer for 2 bil­lion rand of PPC stock at 5.75 rand a share.

Fair­fax’s of­fer is con­di­tional on PPC merg­ing with AfriSam, and the South African com­pany has ap­pointed In­vestec to re­view the pro­posal. Dan­gote Ce­ment, Nige­ria’s big­gest com­pany, con­sid­ered mak­ing a coun­terof­fer but with­drew its in­ter­est last week.

CRH is just one of a num­ber of par­ties con­sid­er­ing whether to bid for PPC. A bid for the South African com­pany would open a new front for the Ir­ish com­pany that has emerged as a con­sol­ida­tor in the global build­ing ma­te­ri­als in­dus­try.

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