Saint-Gobain strengthens US chemicals offer with $2bn acquisition of GCP

GCP is a leading producer of chemical additives for cement (Courtesy of GCP Applied Technologies)
Paris-based construction materials company Saint-Gobain said yesterday that it is to buy US construction chemicals company GCP Applied Technologies for about $2.3bn.

The two have entered into a “definitive agreement” by which Saint-Gobain will pay $32 in cash for each of GCP’s outstanding shares.

The company said this acquisition was a “decisive step in establishing Saint-Gobain’s leading position worldwide in construction chemicals with total sales of more than €4bn (up from €3bn), and furthers the group’s strategy as worldwide leader in light and sustainable construction”.

GCP makes a range of products, including concrete and cement additives, waterproofing and fire protection. It has sales of $903m in 2020, and employs 2,000 people at 50 sites in 38 countries. At the time of writing, its share price was $31.64.

The deal is part of Saint-Gobain’s drive to establish a “worldwide presence” in the growing construction chemicals sector. It has been in that market with its Weber brand. In May it bought French chemical company Chryso for $1bn. The company is hoping its combined platform of Weber, Chryso and GCP will offer customers “a highly comprehensive portfolio of construction chemicals solutions with strong complementary geographic footprints”.

Reuters notes that during a recent conference call, Saint-Gobain chief executive Benoit Bazin highlighted the growth opportunities in the US sector, stimulated by the Biden administration’s infrastructure renewal plan.

He said: “The acquisition will create value by year three following the closing of the transaction. Saint-Gobain will finance the acquisition through cash on its balance sheet. Significant synergy opportunities are estimated at around $85m by year five.”

Simon Bates, chief executive of GCP, commented: “Today opens an exciting new era in GCP’s rich history, for our shareholders, customers and employees. We are thrilled for GCP to join Saint-Gobain, the ideal strategic partner to support our growth. Thanks to its global platform, significant resources as well as commercial and innovation expertise, Saint-Gobain is perfectly positioned to ensure the success of GCP’s operations and people over the long term.”

The deal is expected to close by the end of next year, if shareholders and regulators give their blessing.

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