Approval from Holcim key to €6bn CRH deal

CRH

chief executive

Albert Manifold

is hopeful

Holcim shareholders will pave the way for the Irish group to complete a €6 billion deal by voting to merge with rival Lafarge today.

Holcim is due to ask shareholders to approve the $43 billion merger today at an extraordinary general meeting in Zurich, Switzerland, finally ensuring the on-off transaction goes ahead.

If approved, CRH is in line to buy €6 billion worth of businesses that competition regulators have demanded Holcim and Lafarge sell off as a condition of allowing the pair to join forces.

Speaking after the Irish group’s annual general meeting in Dublin yesterday, Mr Manifold acknowledged it was up to Holcim’s shareholders. “All the signals that we see externally are positive.”

He said the merger makes a lot of sense and appeared to have the backing of institutional shareholders but stressed CRH would have to wait for the meeting’s outcome.

CRH’s €6 billion deal will expand the cement manufacturer, which had €19 billion in sales last year, by 40 per cent and make it the third biggest in its industry in the world, behind the merged Holcim-Lafarge and St Gobain.

The deal would give CRH a substantial presence in the Far East, where up to now it has only operated through shares in joint ventures.

The companies it is buying include Republic Cement in the Philippines, which accounts for about €1 billion of the total package. This will be CRH's first standalone business in the region. Mr Manifold said it is planning to open offices in Australia. "It will give us a much bigger focus in this area," he said.

Recovery

In terms of its existing operations, Mr Manifold said there was more good news than bad in Europe, with the northern part of the continent in particular showing signs of recovery, although Spain was also showing positive signs.

He also said the Irish market was showing indications of recovery. “It’s the second year of growth. It’s slow but it’s coming through,” he said. “Residential is a big part of what we need to do here in Ireland, and having gone through five or six years of no construction, there’s going to be a backlog.”

Meanwhile the group plans to appeal a €115 million fine the Swiss competition regulator has indicated it intends to impose on CRH’s subsidiary in the country as part of an industry-wide action it is taking.