Speculation ramps up over CRH bid for Indian rival

Building materials giant also ‘inevitably’ linked to bid for Australia unit, analysts say

Local reports in India are speculating that LafargeHolcim, the merged building materials giant, will start the process for an estimated $1.5 billion sale of its Indian unit this week.

CRH, which last year paid €6.5 billion for certain Lafarge and Holcim assets prior to their merger, is being linked with a potential bid for the Lafarge India unit. KKR, Blackstone and two local trade players are also being touted in India as likely bidders for the business.

Davy stockbrokers said yesterday morning that CRH “will inevitably be linked with any deal in the space” due to its financial capability.

"Debt pay-down, however, remains management's priority," said Davy analyst Robert Gardiner. Meanwhile, LafargeHolcim is also rumoured to be lining up a potential sale of its 50 per cent stake in Cement Australia.

Likely bidders

The merged company has also repeatedly been linked with a supposed plan to offload its entire Australian and New Zealand division. CRH would also be seen as a likely bidder for this business.

A report in the Australian says Adelaide Brighton would also be a likely bidder for the entire division, but it may be unable to swallow the Cement Australia stake due to antitrust concerns. The report said this could lead to a separate sale of Holcim's Cement Australia stake.

CRH said it does not comment on market speculation.