CRH has revealed it could potentially acquire Adbri Australia in a move that would shake up the country’s cement industry
The company, which already has a major presence in Europe and North America, has partnered with Barro Group to take the next steps to acquire Adbri.
Adbri, formerly Adelaide Brighton, is a major construction materials supplier after establishing itself in 1882.
CRH chief executive Albert Manifold said the potential deal would benefit its existing Australian plans.
“We have held a long-term interest in the Australian construction materials market, which has attractive attributes including stable market dynamics and positive growth prospects, similar in nature to the Southern United States and Central and Eastern Europe where we have a significant presence,” he said in a statement.
“Adbri is an attractive business with quality assets that complement our core competencies in cement, concrete and aggregates. With its leading market positions in Australia, we are delighted that this opportunity has presented itself to us.
“It is the next logical step for CRH to expand our existing presence in Australia, where we have been operating for 15 years.”
The agreed cash consideration of A$3.20 per share values Adbri at an equity valuation of A$2.1 billion (US$1.4 billion) on a 100 per cent basis and values the approximately 53 per cent of issued share capital that the Partners do not currently have an interest in and which CRH has agreed to acquire at A$1.1 billion (US$0.75 billion).
Barro is an Australian family-owned business and approximately 43 per cent shareholder of Adbri. Under the partnership, CRH would acquire approximately 57 per cent of Adbri’s shares not owned by Barro with the intention to delist Adbri from the ASX.
“This acquisition would strongly complement our existing Australian business, creating additional opportunities for growth and development,” Manifold said.
“We look forward to working with the Barro family over the coming years to enhance the long-term performance of the business, leveraging our scale, industry knowledge and technical expertise to improve long-term growth and operating performance and drive value to achieve the true potential of the business.”
CRH and Adbri, in separate releases, confirmed the deal was subject to CRH completing due diligence, Foreign Investment Review Board (FIRB) approval and Adbri independent directors unanimously recommending and committing to vote in favour of the proposal.
Adbri’s independent board committee has recommended entering into a process and exclusivity deed with CRH and the Barro Group to progress a potential transaction.