Holcim names new CEO and gives details of divestment
Switzerland’s Holcim will spin off all its North American operations and float them in New York as a standalone business that could be valued at $30bn, the building materials giant said on Sunday, as it named a new CEO.
Miljan Gutovic, now Holcim head of Europe, replaces Jan Jenisch as CEO on May 1, said the cement giant.
In the biggest shake-up at Holcim since the Swiss group took over French rival Lafarge in 2015, the divestment will probably be completed in the first half of 2025.
The spin-off could value the new company at about $30bn, Jenisch told reporters.
Holcim will not be retaining stake in the new company.
“We’re going to do a full capital market separation of our North American business, so we will list 100% of the business on the New York Stock Exchange,” said Jenisch, who said he is confident of gettiing shareholder backing for the flotation.
The US business aims to boost annual sales from about $11bn now to more than $20bn and generate operating profit of more than $5bn by 2030, said the group.
ATTRACTIVE MARKET
The rest of Holcim’s global business — in Europe, Latin America, Africa and Asia — will remain listed on the Swiss blue chip SMI index, and focus on building solutions like roofing products.
Jenisch, who led Holcim since 2017, will stay as chair and lead the planned listing in the US, where building materials companies trade at higher earnings multiples than in Europe, potentially improving its valuation.
Jenisch described the US as one of the world’s most attractive construction markets, and said that the move would help the new company to capitalise on the region’s infrastructure and construction boom.
Holcim is North America’s biggest cement maker and employs about 16,000 people at 850 sites. The business competes in the region with companies such as Carlisle, and RPM in building products and solutions, and Eagle Materials and Summit Materials in the cement sector.
The US business made up a quarter of Holcim sales in the first nine months of 2023, and was the group’s most profitable region, with sales up more than 20% on average in recent years. The remaining Holcim business will have sales of about Sf17bn, and employ 48,000 people.
The US operations were “simply too successful to be run as a subsidiary”, said Jenisch.