Saint-Gobain has confirmed a takeover deal worth $4.5 billion (AUD) for Australian building material company CSR, which is a major move for the sector.
CSR had previously unanimously recommended that shareholders vote in favour of Saint-Gobain’s takeover deal due to its “attractive value” for shareholders at $9 per share. Under the arrangement, Saint-Gobain will take all issued CSR shares, marking its foray into the Australian building materials market.
“The board believes the Scheme provides attractive value and certainty for CSR shareholders and is a validation of the successful execution of CSR’s strategy,” CSR chairman John Gillman said.
CSR is a major player in the building materials industry. It manufactures PGH bricks and pavers, Monier Roof Tiles, Hebel building blocks, and Gyprock plasterboard, among other things. It is also one of the shareholders of the Tomago Aluminum smelter, which is majority-owned by Rio Tinto.
Saint-Gobain is planning to “explore its options” around the stake in the aluminium business.
The Australian company operates about 30 manufacturing plants with 2500 employees, while Tomago in NSW is one of the country’s biggest smelters. It also has a property portfolio that is “planned to be monetised in the short to mid-term” with a value of $1.3bn.
“We believe Saint-Gobain has strong strategic and cultural alignment with CSR and will support innovation in the Australian and New Zealand building products industry,” CSR managing director and chief executive officer Julie Coates said.
Saint-Gobain, a French-based company, believes CSR’s presence in the Australian market has it well positioned for $60 million in synergies by the third year of ownership. The relationship between the two companies began in 2019 with CSR set to represent the French group’s businesses in Australia and New Zealand.
The French company has a presence in 76 countries with more than 160,000 employees with a focus on the construction and industrial markets.
Saint-Gobain chief executive officer Benoit Bazin said the move was a decisive step into the very attractive high-growth construction market in Australia
“We have admired CSR for many years and have successfully worked together as partners. I am very impressed with CSR’s leadership, the quality of the strategy, and the team’s excellent execution of that strategy,” he said.
“The combination of our joint forces is a fantastic opportunity: Saint-Gobain will bring significant value to CSR by leveraging our expertise on the various core segments of CSR’s operations for the benefit of its customer.
“I look forward to soon welcoming into our group all CSR employees, and to continuing the success story in Australia and New Zealand.
“I am very confident that this transaction will result in enhanced growth and value creation for Saint-Gobain shareholders and provide attractive opportunities for both teams.”
The deal is subjected to regulatory approvals and the approval of CSR shareholders but is expected to close in the second half of 2024.
