Holcim, Lafarge assets sold to Irish-based CRH for $7.3B

CRH has agreed to pay $7.3 billion for assets from rivals Lafarge and Holcim, in a deal that will transform the Irish company into the world’s third-largest building materials supplier, according to a company press release issued this morning,

The deal is part regulatory requirements of asset disposal for the merger of Holcim and Lafarge to be finalized later this year.

“The projected transaction is a key step towards the creation of LafargeHolcim and the value offered reflects the strong quality of the selected assets,” said Wolfgang Reitzle, designated Chairman of the Board of Directors of LafargeHolcim

“This successful outcome demonstrates the quality of the collaborative work undertaken by Holcim and Lafarge teams. With this announcement, we remain firmly on track to complete our proposed merger in the first half of 2015,” added  Bruno Lafont, designated CEO of the future combined company.

The deal will allow Dublin-based CRH, which is partnering with KKR & Co., to move into new markets and expand in existing ones. The builder, created in 1970 through a merger of two Irish companies, operates in 35 countries with about 76,000 people and 18 billion euros in annual sales.

In the Canadian market, all of Holcim’s solely-owned assets will be part of the transaction including Ontario-based Dufferin Construction and Quebec-based Demix Béton.

Dufferin and Demix specialize in major infrastructure projects such as highways, bridges and concrete/asphalt paving, and participate in commercial, industrial and residential developments. They undertake major infrastructure projects such as highway construction and airport redevelopment across Canada. 

Dufferin, with 35 plants in Ontario, and Demix Béton operating 15 plants in Quebec, produce a variety of custom concrete mixes to meet technical specifications for commercial, industrial, institutional, and residential construction customers. The firms provide specialized services and technical support to meet the unique challenges of construction in Canada such as cold-weather concreting, as well as specific applications such as underwater concreting. 

Holcim Canada’s aggregate divisions operate as Dufferin Aggregates in Ontario and Demix Agrégats in Quebec. They include 10 quarries and 15 sand and gravel pits supplying products used to form the bases of highways, roads and sidewalks, as well as to build sewers and watermains, and to manufacture concrete and asphalt products. In total, Holcim Canada aggregates divisions produce more than 18 million tonnes per year of crushed stone, gravel and sand for the commercial, industrial, residential and civil engineering sector. 

Other world-wide assets involved in the CRH purchase include:

• • United States: Holcim’s Trident cement plant (Montana) and some terminals in the Great Lakes area
  • France: in metropolitan France, all of Holcim’s assets, except for its Altkirch cement plant and aggregates and ready-mix sites in the Haut-Rhin region, and a grinding station of Lafarge in Saint-Nazaire; Lafarge’s assets on Reunion island, except for its shareholding in Ciments de Bourbon
  • Germany: Lafarge’s assets
  • Hungary: Holcim’s operating assets
  • Romania: Lafarge’s assets
  • Serbia: Holcim’s assets
  • Slovakia: Holcim’s assets
  • United Kingdom: Lafarge Tarmac assets with the exception of Cauldon plant and certain associated assets
  • The Philippines: the shares of Lafarge Republic, Inc. (LRI) from, and other specific assets of, the major shareholders (namely Lafarge Holdings Philippines, Inc., South Western Cement Ventures, Calumboyan Holdings, Inc., and Round Royal, Inc.), except LRI’s (i) investment in Lafarge Iligan, Inc., Lafarge Mindanao, Inc. and Lafarge Republic Aggregates, Inc., (ii) Star Terminal at the Harbour Center, Manila, and (iii) other related assets.
  • Brazil: assets from both Holcim and Lafarge, which include 3 integrated cement plants and 2 grinding stations (with a total of 3.6 Mt annual cement capacity), as well as some ready-mix plants located in the Southeastern region of Brazil.