Holcim, Lafarge To Sell Some Assets To CRH For EUR6.5 Bln

(RTTNews) - European cement giants Lafarge SA (LFGEF.PK, LFRGY.PK) and Holcim (HCMLY.PK), who have decided on a combination of themselves last April, Monday announced sale of certain assets to Irish building materials company CRH Plc. (CRH, CRH.L) for an enterprise value of 6.5 billion euros.

The sale of the assets in Europe, Canada and elsewhere is a precondition of winning antitrust approval of the $40 billion pending merger between France's Lafarge and Switzerland's Holcim.

The merger of Lafarge and Holcim was approved by the European Commission, the European Union's antitrust authority, last month subject to asset sale by both the companies in regions where their activities overlap.

The companies entered exclusive negotiations following a binding commitment made by CRH regarding the sale of the assets, including operations mainly in Europe, Canada, Brazil and the Philippines.

The assets being disposed generated estimated 2014 sales of 5.2 billion euros, with an estimated 2014 operating Earnings Before Interest, Tax, Depreciation and Amortization or EBITDA of 744 million euros.

CRH was in a close race for the assets with a private-equity consortium including Blackstone Group LP, Cinven and Canada Pension Plan Investment Board.

The EC's approval is conditional upon the divestment of Lafarge's businesses in Germany Romania and the UK. Holcim is required to divest its operations in France, Hungary, Slovakia, Spain and the Czech Republic.

Switzerland-based Holcim operates in more than 70 countries, generates an annual turnover of more than 16 billion euros, and has about 71,000 employees. France-based Lafarge is active in 64 countries, generates an annual turnover of more than 15 billion euros and employs 65,000 people.

The companies said today that the divestments are subject to the completion of the merger, including a successful public exchange offering and approval by Holcim's shareholders in the second quarter of 2015.

The closing of the planned merger is expected in the first half of 2015. It is expected to create the most advanced group in the industry, operating in 90 countries, with a strong balance sheet. The combination is estimated to generate superior value for its shareholders, customers and other stakeholders.

Meanwhile, CRH said in a separate statement today that it would fund the acquisition by 2.0 billion euros of cash from balance sheet, new debt and a 9.99 percent equity placing. CRH expects the deal to be around 25 percent accretive to earnings per share in first full year of ownership.

Holcim closed up 0.6 percent in Zurich on Friday at 64.45 Swiss francs. Lafarge rose 0.7 percent in Paris to settle at 60.81 euros.