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HeidelbergCement to acquire Italcementi

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World Cement,

HeidelbergCement has announced that it has entered into a purchase agreement to acquire a 45% share holding in Italcementi for a total purchase price of €1.67 billion. The acquisition, expected in 2016, is subject to regulatory approval, particularly regarding competition in Europe and the US.

Following closing of the stake purchase, HeidelbergCement will launch a mandatory public takeover offer to all remaining Italcementi shareholders at the expected price of €10.60 per share in case. At this price, the transaction would value Italcementi’s total equity at €3.7 billion.

In a statement, HeidelbergCement said that the acquisition of Italcementi is a unique opportunity to accelerate the growth of HeidelbergCement. ‘It will add a valuable portfolio of assets with a perfect geographical fit to the existing footprint of the Group.’ Italcementi operates in 22 countries and has particularly strong market positions in France, Italy, the US and Canada. It also has high growth potential in emerging markets including India, Egypt, Morocco and Thailand. Italcementi has spend a total of €3.5 billion in Capex over the past 7 years and has extensive reserve positions in cement plants and aggregate quarries. The two companies share a philosophy of operating with strong local brands.

The acquisition would leave HeidelbergCement as the leading global player in aggregates, world number two in cement and number three in ready-mix concrete. The acquisition adds a presence in several major markets, including Egypt, Morocco and Thailand, and strengthens HeidelbergCement’s position in the US, India and Kazakhstan. In Europe, Italcementi will also add low-cost export plants on the coast in Bulgaria and Spain.

“There is no other major Group in the industry which offers a similar complementary fit to our own operations,” said Dr Bernd Scheifele, Chairman of HeidelbergCement. “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 programs in the context of a larger platform.”

Adapted from press release by

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