CRH issue 2014 development update
Company provides details of last year’s acquisition spend and divestment proceeds
YESTERDAY’s breaking news that the assets being sold as part of the proposed merger of Lafarge and Holcim are to be acquired by CRH plc for €6.5 billion (£4.9 billion), in what will be the Dublin-based international building materials group’s biggest ever acquisition, has, perhaps not surprisingly, somewhat overshadowed CRH’s recent 2014 development strategy update.
Nevertheless, in January the Group revealed that a total of €0.19 billion had been spent on acquisitions and investments in 2014, reflecting the completion of 21 transactions. Sixteen divestment transactions were also completed during the year, realizing total disposal proceeds of €0.35 billion.
Commenting on last year’s transactions, CRH’s chief executive, Albert Manifold (pictured), said: ‘In August 2014 we announced a multi-year €1.5 billion to €2 billion divestment programme; the proceeds of €0.35 billion generated in 2014 demonstrate that this programme is well under way.
‘With a refined portfolio focus, the Group is now well-positioned to pursue acquisitions which are in line with our long-term growth strategy. The 21 transactions completed during 2014 comprise primarily bolt-on acquisitions for our existing operations in the Americas, together with the expansion of our builders merchanting network in Europe.’
In Europe CRH spent approximately €40 million on eight acquisitions and generated around €240 million from seven divestments.
The company’s Heavyside operations acquired selected ready-mixed concrete and aggregates assets from CEMEX Ireland (including 12 million tonnes of high-quality reserves) and a precast concrete business in Denmark, adding total annualized sales of c.€10 million.
The disposal of CRH’s 50% equity stake in Denizli Çimento, the Group’s only involvement in the Turkish construction market, was the largest single divestment in 2014, realizing proceeds of €170 million. The Heavyside Division in Europe also disposed of a number of ready-mixed concrete and concrete products businesses.
In the Americas CRH spent approximately €150 million on 13 acquisitions and generated around €110 million from nine divestments.
Eight bolt-on acquisitions were completed by CRH’s Americas Materials Division in 2014 throughout the US, adding annualized incremental sales of around US$50 million and more than 230 million tonnes of aggregate reserves. The division also disposed of several non-core operations across the US and completed an asset exchange in the state of Washington. Meanwhile, the Americas Products Division completed five transactions with around US$90 million of incremental sales, and sold five operations.
