Holcim and Lafarge sell $7.4bn of assets to CRH as merger continues

Cement makers Holcim and Lafarge are to sell a number of production plants and other facilities to the Dublin-based building supplies company CRH for a total of $7.4bn. 

The purchase is part of an agreement reached between European competition authorities and the two companies, which are in the process of merging.  

The deal, which was announced in April last year will create the world’s largest cement maker, with estimated annual sales of $44bn. However, in some countries it will lead to Holcim-Lafarge holding an overly dominant position in the market, hence the disposals.  

The assets include factories in Europe, Canada, Brazil and the Philippines, which generated estimated sales of $5.9m in 2014 and operating profits of $840m. 

Bruno Lafont, Lafarge’s chief executive, said that $5.6bn of the money realised by the sale would be split between the companies and the remainder would be used to cover debts. 

The assets being sold to CRH include all of Lafarge’s UK operations, which will give CRH the largest market share in that country.  

Albert Manifold, CRH’s chief executive, said: "This transaction represents a significant value creation opportunity for CRH. We are acquiring a quality portfolio of assets, which complements our existing positions at an attractive valuation and at the right point of the cycle.       

"The assets will integrate well into existing CRH networks benefiting from our strong business-building capabilities while providing an important platform for future development opportunities." 

Photograph: Albert Manifold, CRH chief executive (http://www.merc.ie)