Shares in CRH (LON:CRH) have jumped in London this morning, outperforming the broader market, as the building materials group inked a deal to acquire an US cement company. The move comes with the FTSE 100 group looking to expand its footprint in North America.
As of 09:47 BST, CRH’s share price had added 2.61 percent to 2,727.00p, outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.18 percent higher at 7,285.03 points. The group’s shares have added more than eight percent to their value over the past year, but have given up some three percent in the year-to-date.
CRH announced in a statement this morning that it had reached an agreement to acquire Kansas-headquartered Ash Grove Cement for $3.5 billion. The transaction, which be financed through existing financial resources, is expected to close around the end of the current year.
CRH is the biggest customer of Ash Grove, which operates eight cement plants across eight US states. For the year ended December 31, 2016, the US group reported profit before tax of $215 million and gross assets of $2.5 billion.
“Ash Grove is an excellent addition to CRH’s portfolio of businesses across North America as we seek to deploy our capital into high quality businesses,” the FTSE 100 group’s chief executive Albert Manifold commented in the statement.
Bloomberg noted in its coverage of the news the deal comes the same week as Heidelberg Cement AG agreed to buy Italian assets from Cementir Holding SpA for €315 million. The acquisition will be the largest for CRH since 2015, when it agreed to buy cement assets from Lafarge SA and Holcim Ltd in a €6.5 billion deal.