CRH plc 1H11 development strategy update
CRH plc, the international building materials group, today announces 21 acquisition and investment initiatives, totalling approximately €200m (US$287m) undertaken during the 1H11 as part of its continuing programme of development activity.
The development initiatives included in this update are as follows:
- Europe Materials: 1 acquisition, 2 investments – €40m
- Europe Products & Distribution: 4 acquisitions, 1 investment – €20m
- Americas Materials: 7 acquisitions, 2 investments – €98m
- Americas Products & Distribution: 4 acquisitions – €28m.
CRH has agreed to acquire VVM from the Van Eeckhout family, subject to official approval. VVM operates two grinding centres in Belgium, in the ports of Antwerp and Ghent. These have a combined cement capacity of 1.5Mta. The deal also includes two batching plants, one in Belgium and the other in France. The transaction will provide CRH with the capacity to supply cement to its Dutch downstream operations.
With this deal, CRH’s spending on acquisitions for the year to date to roughly €300m, of which VVM would represent about one third.
Commenting on these developments, Myles Lee, CRH CEO, said: "The first six months of 2011 saw development activity continue across all six operating segments, strengthening our existing market positions and adding valuable and well-located aggregates reserves. The VVM transaction, which is subject to regulatory approval, represents an important strategic opportunity for our existing Cementbouw cement trading and ready-mixed concrete business in the Benelux, while also complementing our products businesses in the region. The pipeline of potential acquisitions remains good, and with our strong balance sheet we have the capacity, where we see value, to capitalise on these opportunities.
"The group’s proactive approach to portfolio management was reflected in the completion of a number of divestments which generated proceeds for reinvestment of approximately €345m in the first half of 2011."
Moreover, the Europe Materials Division completed transactions in Portugal and Ukraine whilst increasing its holding in a Polish subsidiary during the first half of 2011 at a total cost of €40m and adding €36m of annualised incremental sales. The Portuguese joint venture Secil has bought Lafarge’s Portuguese aggregates and concrete operations, consisting of four quarries and 30 batching plants. In the Ukraine, it acquired Lviv Beton, which produces pre-cast and ready-mixed concrete and owns aggregates deposits near the city of Lviv. Next door, in Poland, CRH has increased its stake in lime-sand brick producer Grupa Silikaty from 75% to 90%.
The products and distribution side spent some €20m in Belgium, The Netherlands and Australia. The American heavy building materials arm spent €98m on buying aggregates and asphalt operations in New Hampshire, Ohio, Michigan, Virginia, Mississippi, Texas, New Mexico, Colorado and Utah. In American products and distribution arm, additional businesses were acquired in Québec, Michigan, Florida and Texas for a total of €28m.
Published under Cement News
