Germany’s largest cement maker will buy a 45% stake in the Bergamo-based building materials company for €1.7 billion in cash and shares, a move that will see it later acquire the remainder of the company.
The deal follows the recent €41 billion merger of
HeidelbergCement has 45,000 employees in 2,300 locations in more than 40 countries, and is present in northern Europe, Asia and the US, while Italcementi is in 22 countries. Both companies operate in the US.
Italcementi made revenues of €4.1 billion in 2014 compared with around €13 billion in sales at HeidelbergCement.
“There is no other major group in the industry which offers a similar complementary fit to our own operations,”says Dr Bernd Scheifele, chairman of the HeidelbergCement management board.
“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 programmes in the context of a larger platform.”
Dr Lorenz Näger, chief financial officer, added: “Following closing of the transaction, our goal is to deliver annual run-rate synergies of €175 million by 2018. Italcementi is expected to significantly add to our free cash flow and we are upgrading our mid-term financial targets for 2019 to reflect the positive impact of the transaction. We remain fully committed to our dividend policy and shareholder return focus presented at our Capital Markets Day in June 2015.”
