CRH to buy Ash Grove in US$3.5bil deal to bulk up

NEW DELHI: CRH Plc agreed to buy Ash Grove Cement Co in a deal valued at US$3.5bil to expand the Dublin-based building-materials company’s footprint in the Americas, where it got more than half its profit last year.

Stockholders of the Overland Park, Kansasbased cement maker will get US$449 to US$454 per share, according to a Sept 20 statement from Ash Grove. That’s as much as 59% more than the stock’s closing price on Wednesday in New York.

CRH, which doubled profit between 2014 and last year, is bulking up in the United States amid a global consolidation for cement makers that created LafargeHolcim Ltd from the mega-merger of Swiss and French rivals. The deal would be the largest for CRH since it agreed to buy cement assets from LaFarge S.A. and Holcim Ltd in a (US$7.7bil) deal in 2015.

The transaction has been unanimously approved by the directors of Ash Grove and is expected to close in late 2017 or early 2018, subject to stockholder approval, regulatory approval and other customary conditions, according to the Ash Grove statement. J.P. Morgan Securities was financial adviser to Ash Grove for the transaction.

The purchase would be financed through existing financial resources, CRH said in a Sept 21 statement on its website.

The exact payment amount to shareholders will not be determined until after the transactions close as components may fluctuate, according to the statement from Ash Grove, which didn’t elaborate on how the considera- 6.5 billion euro tion was calculated.

CRH is the biggest customer for Ash Grove, a 135-year-old company with 2,700 employees and eight cement plants across eight US states, according to the statements.

The Dublin-based materials company, which sold its interior building-products division to Beacon Roofing Supply Inc on Aug 24, saw potential for further acquisitions rise after the deal left it with more cash in hand, according to a Bloomberg Intelligence report. CRH is planning deals worth three billion euros by mid next year, according to the report.

CRH closed at 29.94 euros in Dublin on Wednesday, after rising less than 2% in the past 12 months. Ash Grove, which has gained 17% in the same period, closed at US$285. — Bloomberg