It’s back to Plan A for Manifold and CRH

If CRH chief executive Albert Manifold was worried on Thursday about getting its €6.5 billion purchase of overlap assets from the Holcim-Lafarge merger over the line, he didn't let on.

"We always have a Plan B at CRH. . . and a Plan C and a Plan D," he replied to a query about what the company might do if the transaction fell while Holcim and Lafarge prevaricated over their €40 billion merger, which gave CRH its buying opportunity.

With the news yesterday that Holcim and Lafarge had struck a deal to progress the merger, involving a bigger slice for Holcim and the withdrawal of the offer of the chief executive's role for Lafarge's Bruno Lafont, the biggest obstacle to the biggest deal in Irish corporate history was scaled.

It is back to Plan A for CRH. The deal provides the perfect launch pad for the company to smash its earnings over the boundary.

CRH’s revenue, once it acquires the businesses in July, are set to jump from almost €19 billion to a dizzying €24 billion. Its earnings before interest, tax and depreciation will jump from €1.6 billion to an estimated €2.4 billion.

That is about four times the income generation of Kerry group, another home- grown success story that has made its mark on the global stage.

As far as the wild geese of corporate Ireland go, CRH is flying into a league of its own.

Manifold has promised investors he can deliver up to €90 million in annual synergies by year three, and insists the enlarged business will “throw off cash”.

He implied the company would use that cash to grow even further. This acquisition, if managed properly, will give CRH the firepower for even more buyouts.

The integration of the acquisition won’t be easy: 685 new facilities across four continents. It will be a gruelling test of CRH management’s ability and patience.

Shareholders have backed Manifold with a €1.6 billion fundraising, its banks have backed it with €3 billion in fresh debt, and CRH’s board has backed its chief executive at every turn.

Now it is up to Manifold and his team to deliver. So far, the omens are good.