CRH remains on acquisition trail with €178m bid for Egyptian group

 

CRH has made a €178 million offer to buy Egyptian cement group Misr Beni Suef Cement, subject to the timely commissioning of a new plant and due diligence.

The building materials group confirmed it had exclusive negotiating rights for five months but wanted to see a number of conditions fulfilled before finalising the deal.

Beni Suef is building a 1.4 million tonne cement plant south of Cairo and the deal is subject to its satisfactory completion and commissioning in the last quarter of the year, Mr Myles Lee, CRH's general manager finance, said.

Beni Suef said earlier this month that it was in talks with a foreign investor and named the Irish firm yesterday. The company, which represents around 5 per cent of the growing Egyptian market, is partially listed but 60 per cent remains in the hands of its founders.

Market sources said CRH would want to control at least 75 per cent of the company before proceeding with the deal.

Egyptian analysts said the offer represented a premium of 25 per cent over yesterday's official closing price and constituted a reasonable offer.

The consideration of €178 million, or 835 million Egyptian pound, is made up of 535 million Egyptian pounds of assumed debts and obligations, while the remaining 300 million represents the value of the shares.

CRH, which has been seeking to expand in the eastern Mediterranean area, took its first step into the region last year when it bought a 25 per cent stake in Nesher Cement, the only producer of cement in Israel and Palestine.

This marks its third attempt to move into the Egyptian market after it tabled two unsuccessful bids for companies in Egypt.

In June last year, it lost out to French group Ciment Francais for a 25 per cent stake in Suez Cement, which cost around €160 million.

It also expressed an interest in one of Egypt's biggest cement companies, Helwan Portland Cement, but faced competition from Portuguese company Secil and from a local firm, the Arab Swiss Engineering Company.

CRH has remained active on the acquisitions front and has spent nearly €460 million buying companies in the year to date.