Deals and IPOs

CRH in Talks to Buy $3.5-4.5 Billion of Cemex Assets


Irish building materials firm CRH is in talks with Cemex to buy U.S. and European assets worth up to $4.5 billion from the Mexican cement maker, the companies said on Monday.

The two firms said the deal was subject to due diligence, shareholder and regulatory approval.

"Depending on the scale of businesses included in any potential deal, and the outcome of due diligence, the total value of the transactions could range from $3.5 billion to $4.5 billion," the firms said in a statement.

CRH, one of the world's biggest suppliers to builders, added separately that it had "sufficient balance sheet capacity to debt finance any transaction that might take place."

CRH said in August it expected to continue a steady flow of acquisitions and that it would look at buying Anglo American's Tarmac business.

Davy analyst Barry Dixon said the deal was a "good fit strategically."

"This is a very interesting development for CRH and illustrates its ability to use its balance sheet strength to make substantial opportunistic acquisitions," Dixon said in a research note.

"This is positive for the stock, which has recently underperformed," he added.

Shares in CRH were trading 2.9% lower in London at 26.8 euros. They were 3.4% weaker at 26.7 euros in light Dublin trade, compared with a 2.9% fall on the broader Irish market.

The assets include operations in Florida and Arizona which Cemex is obligated to divest by the U.S. regulator as a result of its acquisition earlier this year of Australian building materials group Rinker Group.

The deal will also include other U.S. interests, as well as businesses in Spain, Austria and Hungary.

In September, CRH said it had bought four U.S. companies for a total cash consideration of $350 million. Last year it acquired Ashland's Ashland Paving and Construction for $1.3 billion.

Cemex, based in the northern Mexican city of Monterrey, has operations in more than 50 countries. The news came as Cemex gave guidance for third quarter revenues.