CRH considers €190m deal to buy cement manufacturer in India
Irish group and French rival said to be bidding for Bangalore manufacturer
Outgoing CRH chief executive Myles Lee indicated at the group’s annual general meeting last May that it intended to increase its focus on emerging economies when it came to making acquisitions
Sree Jaya Jothi has an asking price of about $250 million (€190 million), according to local reports, and a number of potential buyers, including CRH, French manufacturer Vicat and private equity group Blackstone, have run the rule over it in recent weeks.
Blackstone has decided not to proceed, leaving CRH and its French rival, which is seen in some quarters as the front- runner, to fight it it out.
CRH already owns 50 per cent of Hyderabad-based cement manufacturer My Home Industries, and is bidding for Sree Jaya Jothi through this joint venture. A final announcement on the sale is due shortly. CRH said it did not comment on speculation.
Sree Jaya Jothi produces about three million tonnes of cement each year. Its market includes Bangalore, India’s third biggest city and a key centre for the country’s technology industry.
Outgoing CRH chief executive Myles Lee indicated at the group’s annual general meeting last May that it intended to increase its focus on emerging economies when it came to making acquisitions.
The Irish group regularly spends large sums on acquisitions, which tend to consist mainly of smaller rivals that are easily absorbed into the larger organisation.
During the first six months of this year, it completed deals worth a total of €470 million, and earned €185 million from disposals.
Up to now, CRH has concentrated on the US and Europe and taken a more conservative approach to emerging markets. However, it has interests in both India and China, as well as the Ukraine, where it agreed to buy Mykolaiv Cement earlier this year.
Sree Jaya Jothi’s owner, Shriram, is a conglomerate with assets of $9 billion consisting of a large financial services business, along with investments in areas such as IT, property, infrastructure, engineering and other businesses.
The group is in the process of selling a number of what are described as non-core assets.
CRH is Ireland’s largest company. Last year it made profits of €674 million on sale of close to €18.7 billion.
It recently announced that chief operations officer, Albert Manifold, will succeed Mr Lee as chief executive next year.