Deal-making run is over

According to a report by Bloomberg, a wave of consolidation among European cement makers is over. This news comes from HeidelbergCement AG Chief Executive Officer Bernd Scheifele.

“There won’t be any big movements,” he announced at a press conference in Heidelberg, Germany. Large-scale combinations “have now happened.”

HeidelbergCement and competitor LafargeHolcim Ltd. detailed their first full-year earnings last week after announcing multi-billion euro deals in 2015 that reduced competition on global cement markets. Lafarge SA of France and Switzerland’s Holcim Ltd. completed a merger in July to create the world’s biggest producer of the building material, a move followed by HeidelbergCement’s proposed takeover of Italcementi SpA.

The consolidation arrives as cement makers around the world fight against slowdowns in China, Brazil and Russia as well as pressure on prices of building materials in some markets like Nigeria and India. Both European producers expect overall demand by volume to rise this year while they focus on savings in a bid to boost profitability.

This has already started to happen in India, where UltraTech Cement Ltd. announced in February the planned purchase of cement units belonging to Jaiprakash Associates Ltd. and Birla Corp. Ltd. agreed to acquire the cement business of Reliance Infrastructure Ltd.

LafargeHolcim is selling US$3.6 billion worth of assets while working to meet a pledge for savings of more than US$1 billion through 2017.

Edited from source by Joseph Green. Source: Bloomberg

Read the article online at: https://www.worldcement.com/europe-cis/23032016/wave-consolidation-european-cement-heidelbergcement-756/