Reuters logo
UPDATE 2-Ireland's CRH drops out of bidding for South African cement maker PPC
December 7, 2017 / 8:11 AM / 7 days ago

UPDATE 2-Ireland's CRH drops out of bidding for South African cement maker PPC

(Adds details, analyst’s comment, updates share prices)

By Noor Zainab Hussain, Padraic Halpin and Tanisha Heiberg

Dec 7 (Reuters) - Ireland’s CRH, the world’s third-largest building materials supplier by market value, has decided not to bid for rival PPC, the South African company said on Thursday, leaving the field clear for rival suitors.

Last month PPC said CRH had made an approach with a cash proposal and had been given time to conduct due diligence and then come back with another offer.

“CRH has decided not to submit an updated expression of interest and therefore considers it appropriate to withdraw from the Independent Board’s process,” PPC said in a statement.

PPC last month turned its back on a takeover attempt by AfriSam, backed by Canada’s Fairfax Africa . However, regulations allow Fairfax until Dec. 12 to post its partial offer circular.

CRH said in August it had around 5 billion euros ($5.90 billion) in cash to spend on M&A over the next 18-24 months. It has committed 3 billion euros of that to buying Ash Grove Cement Co and a further $750 million on other cement acquisitions in Florida.

However, a purchase of PPC would have run counter to CRH’s recently declared acquisition strategy, with Chief Executive Albret Manifold saying last month that the firm would concentrate on deals in North America and would not overinvest in developing economies.

“CRH’s strategic priority remains its end-markets in Europe and North America ... we always viewed PPC as a low probability deal which fitted into the ‘we look at all opportunities’ category,” said Davey analyst Robert Gardiner, who rates CRH shares as “outperform”.

A spokesman for Dublin-based CRH said the company had no comment to make.

PPC, which has been a target for industry consolidation for several years, said it was still talking to Switzerland’s LafargeHolcim.

LafargeHolcim has said that it is in talks with the board of PPC regarding a possible transaction in Africa, while Dangote Cement, majority owned by Africa’s richest man, Aliko Dangote, has also shown an interest.

Dangote Cement made an approach in September, but later withdrew, saying it did not want to get into a lengthy process with an uncertain outcome.

Shares in PPC, which has a market capitalisation of 11.02 billion rand ($812 million) and had net debt of 4.4 billion rand at the end of September, were down 4.4 percent at 6.59 rand at 1035 GMT, when CRH’s share price was up 1.2 percent at 29.7 euros.

PPC last month reported a 36 percent rise in half-year earnings, helped by a robust performance in Zimbabwe and Rwanda.

($1 = 0.8480 euros)

$1 = 13.5766 rand Reporting by Noor Zainab Hussain in Bengaluru, Padraic Halpin in Dublin and Tanisha Heilberg in Johannesburg; editing by Jason Neely, Greg Mahlich

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below