HeidelbergCement to acquire Italcementi

HeidelbergCement to acquire Italcementi
Published: 29 July 2015

Eleven days after the completion of the acquisition of Lafarge by Holcim to form LafargeHolcim, HeidelbergCement has agreed to acquire Italcementi, with a combined cash and share issue for the 45 per cent controlling stake held by Italmobiliare. A cash offer of EUR10.60 per share will be made by HeidelbergCement for the remaining shares in Italcementi. This represents a 70.6 per cent premium on the weighted average share price of Italcementi over the past three months.

Dr Bernd Scheifele, chairman of the Management Board, commented: “There is no other major Group in the industry which offers a similar complementary fit to our own operations. With the market recovery gaining traction in Southern Europe and the US, it is now the right time for us to accelerate our growth with this transaction. We see significant potential for value creation with the realisation of synergies and the implementation of our proven standards of operational and commercial excellence. We believe we are paying a fair price for high quality assets when taking into account the potential in recovering core markets and the value which can be unlocked by applying industry-leading optimisation programmes in the context of a larger platform.”

Dr Lorenz Näger, HeidelbergCement's chief financial officer, added: “Following closing of the transaction, our goal is to deliver annual run-rate synergies of EUR175m by 2018. Italcementi is expected to significantly add to our free cash flow and we are upgrading our mid-term financial targets for 2019 to reflect the positive impact of the transaction. We remain fully committed to our dividend policy and shareholder return focus presented at our Capital Markets Day in June 2015.”

Related to this move, HeidelbergCement has released its first half results 12 hours early. These show an 11.2 per cent increase in turnover to EUR6470m and EBITDA improved by 22.3 per cent to EUR1052m while the trading profit advanced by 27.5 per cent to EUR672m. The pretax profit rose by 69.9 per cent to EUR406m and the net attributable profit improved by 33 per cent to EUR242m. Net debt at the end of June was 20.1 per cent lower than a year earlier at EUR6305m, giving a gearing level 34.9 per cent lower at 40.7 per cent. Capital investments in the period declined by 3.1 per cent to EUR406m.

Group cement and clinker deliveries increased by 0.1 per cent to 38.8Mt while the aggregates tonnage rose by 4.4 per cent to 113.43Mt and ready-mixed concrete deliveries improved by 1.2 per cent to 17.4Mm³, while asphalt sales were 5.4 per cent ahead at 4Mt.

For the full year, HeidelbergCement expects a significant increase in turnover, operating profit and running profit. The workforce declined by 0.7 per cent to 45,558 employees.