CRH agrees to buy stake in Secil

CRH agrees to buy stake in Secil
Published: 22 March 2004

CRH plc, the international building materials group, today announced that it has reached agreement to acquire a 49 per cent equity stake in Secil, a major Portuguese manufacturer of cement and readymixed concrete. Secil is a wholly-owned subsidiary of Semapa, a publicly quoted company in Portugal. Semapa and CRH have also agreed the terms of a shareholder agreement under which they will have joint management control of Secil. The agreement is based on an enterprise value of Euro900m for 100 per cent of Secil, including an estimated 44 million relating to Secil’s investment in associated undertakings. Under the assumption of net debt at closing of Euro 140m, the cash consideration for CRHs 49 per cent share of Secil will be Euro372m, on which goodwill of 45 million arises. Subject to the satisfactory outcome of the due diligence process and obtaining approval from the European Commission, the transaction is expected to close by mid-year.

In Portugal, Secil operates three integrated cement plants with total capacity of 4.2Mt, 41 readymixed concrete plants, six hard rock quarries and has access to total permitted stone reserves of approximately 550Mt. The company also produces precast concrete and mortars in Portugal.  Secil is a prominent producer of cement in southeastern Tunisia where it has one plant with capacity of 1.1Mt. These operations employ approximately 2000 people.

Commenting on the proposed transaction, Liam OMahony, Chief Executive of CRH plc, said: This transaction presents a unique strategic opportunity for the Europe Materials Division. It offers a leadership position in the attractive Portuguese cement market, which has traditionally had high per capita consumption, and also provides development opportunities in Tunisia and Lebanon. The partnership between CRH and Semapa will result in a strong combination of knowledge, experience and resources which will facilitate the expansion of Secils businesses across the industry supply chain, particularly as the general economy in Portugal recovers and construction activity increases.