CRH sees off rival Vicat to snare Indian manufacturer in deal worth €175m

CRH and its Indian joint venture have seen off competition from French rival Vicat to clinch a €175 million deal to buy a cement manufacturing business from conglomerate Shiriam.

The Irish building materials group said yesterday that its 50/50 joint venture in Hyderabad, My Home Industries (MHIL), has agreed to buy cement manufacturer Sree Jayajothi for €175 million.

CRH and MHIL are each putting €35 million towards the cost of the purchase, while the balance will be financed from the Indian company’s existing debt capacity.

Likely suitors
Last month, The Irish Times reported CRH and Vicat were likely suitors for the cement manufacturer, whose parent, Indian conglomerate Shiriam Group, put it on the market earlier this year.

Local reports also said private equity group Blackstone ran the rule over the Indian company, but dropped out of the bidding process last month, leaving CRH/MHIL and Vicat, which many tipped as the frontrunner.

Sree Jayajothi produces 3.2 million tonnes of cement a year.

Its market includes Bangalore, India’s third-biggest city and a key centre for the technology industry.

Outgoing CRH chief executive Myles Lee indicated at the group's annual general meeting last May it intended to increase its focus on emerging economies. The Irish group regularly spends large sums on acquisitions, which tend to consist of smaller rivals easily absorbed.

During the first six months of this year, it completed deals worth €470 million, and earned €185 million from disposals.