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HeidelbergCement buys Cementir Italia

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HeidelbergCement is to expand its footprint in Italy with the acquisition of Cementir Holding’s Italian subsidiary, Cementir Italia, for €315 million. The acquisition will be made through HeidelbergCement’s Italian subsidiary, Italcementi, and includes all of Cementir Italia’s cement and concrete business, as well as its wholly-owned subsidiaries, Cementir Sacci and Betontir.

The acquisition will add five integrated cement plants and two cement grinding stations, with a combined capacity of 5.5. million tpy, to Italcementi’s operations. A network of terminals and concrete plants is also included in the deal.

“Cementir Italia provides an ideal industrial and geographic fit that significantly improves out nationwide presents in Italy,” said Dr Bernd Scheifele, Chairman of the Managing Board of HeidelbergCement.

“The acquisition is a unique opportunity to grow and consolidate [our] position in the Italian market,” continued Scheifele. “We see strong recovery potential in southern Europe, and especially in Italy, over the coming years.”

The transaction is expected to complete in early-2018. To offset the acquisition, HeidelbergCement said it would dispose of non-core assets within its broader portfolio review.

2016 pro-forma sales revenues at Cementir Italia were €136 million.

The transaction would allow Cementir Holdings to reduce its debt-to-earnings ratio, said its Chairman and CEO, Francesco Caltagirone. “This will enable the group to take the opportunities arising in the future.”

The Italian cement market has suffered significant challenges, as demand collapsed from a peak of 47 million t in 2006 to just 18 million t in 2016, according to CW Research. This has led to a series of consolidations within the market, as smaller players have been absorbed into larger groups. The latest merger will see the industry dominated by HeidelbergCement’s Italcementi and Buzzi Unicem.

The transaction is subject to approval by the Italian Antitrust Authority, which recently fined Italcementi, Buzzi Unicem, and Cementir Italia over allegations of price fixing and market coordination. All three companies deny the charges.

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