HeidelbergCement purchases Italcementi
German cement maker HeidelbergCement agreed to buy control of Italcementi for 6.7 billion euros, or $7.4 billion, reports Reuters. Italcementi serves customers in more than 20 countries and is a market leader in Egypt.
Last month, HeidelbergCement said it would be disciplined about acquisitions and focus on returning cash to shareholders. However, company representatives say the offer was too good to pass up, especially with the recovering economy in southern Europe.
“The saying is there are no cheap assets in this industry,” says Chief Executive Bernd Scheifele. “There are, and I think we have found some of them.”
The company says the acquisition of Italcementi will give it access to new markets in Egypt, Morocco and Thailand, as well as reduce Italcementi’s dependence on Italy, France and Morocco.
According to Reuters, HeidelbergCement said it would make a mandatory offer for the rest of Italcementi as long as its 1.67 billion-euro cash-and-shares bid for 45 percent stake went through as planned in 2016.
In addition, the company will pay Italmobiliare, Italcementi’s top shareholder, the equivalent of 10.60 euros per share, says Reuters, which is a 61 percent premium to Italcementi’s closing price. Italmobiliare will also get 4 to 5 percent of HeidelbergCement as part of the deal, financed by a new share issue by the German company of up to 10.5 million new shares.
HeidelbergCement says the acquisition cost compared favorably with what it could gain by investing the same capital in its own business, and that it could achieve synergies of at least 175 million years per year by 2018, reports Reuters.
About the Author: Allison Kral
Allison Kral is the former senior digital media manager for North Coast Media (NCM). She completed her undergraduate degree at Ohio University where she received a Bachelor of Science in magazine journalism from the E.W. Scripps School of Journalism. She works across a number of digital platforms, which include creating e-newsletters, writing articles and posting across social media sites. She also creates content for NCM's Portable Plants magazine, GPS World magazine and Geospatial Solutions. Her understanding of the ever-changing digital media world allows her to quickly grasp what a target audience desires and create content that is appealing and relevant for any client across any platform.Subscribe to Pit & Quarry
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