Building materials giant CRH is on the verge of doing a deal worth up to €3.25 billion with rival Cemex. The group is in talks to buy a range of businesses from Cemex in what would be its largest deal to date.
If the transaction goes ahead, it will be the biggest acquisition to date for CRH, and one of the largest in Irish corporate history.
Cemex is selling the operations after the US competition authorities made their disposal a condition of approving the company's €14.2 billion takeover of another building materials player, Rinker.
Cemex is a global business headquartered in Mexico. It is a majority shareholder in Irish firm Readymix. The group is buying Rinker through an Australian subsidiary.
Both CRH and Cemex revealed in separate announcements yesterday that the talks were under way.
The businesses are spread across the US, Spain, Austria and Hungary. They include quarried products such as stone, sand and gravel, along with cement plants, concrete producers and a gypsum wall board distribution operation. Around 80 per cent of them are in the US.
CRH said yesterday that "the completion of any transaction would be subject to satisfactory due diligence, the approval of the respective boards of directors and the granting of the required regulatory approvals, including the US Department of Justice and other anti-trust authorities".
CRH finance director Myles Lee said integrating the new businesses into its operations would be straightforward.
He explained that they would slot into four of its six different divisions - products, materials and distribution - in the US and Europe.
"It will be like integrating a range of bolt-on acquisitions, which we are used to doing," he said.
The acquisition is likely to boost sales and earnings if it goes ahead. Merrion Stockbroker analyst John Mattimoe said the deal could potentially add between 25 per cent and 33 per cent to the group's US revenues, which were €4.63 billion in the first six months of the year.
Barry Dixon, analyst at company broker Davy, said that on the basis of conservative assumptions on financing and tax, it could add between 5 per cent and 8 per cent to full-year earnings.
Mr Dixon also predicted that it could boost earnings per share over a full 12-month period from a likely €2.99 now to between €3.12 and €3.24.
