Irish building materials group CRH (LON:CRH) will be required to divest its Rocky Gap quarry as a condition of its planned acquisition of privately held Pounding Mill Quarry Corp, the US Department of Justice (DoJ) has announced. The news comes after the blue-chip group recently unveiled plans to bring together some of its European and American units as it looks to boost its profit margin by 2021.
CRH’s share price has slipped into the red in today’s session, having given up 0.66 percent to 2,709.00p as of 10:32 BST. The stock is marginally outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.92 percent in the red at 7,611.75 points. The group’s shares have lost nearly four percent of their value over the past year, as compared with about a 2.5-percent gain in the Footsie.
DoJ to require divestment
The DoJ announced on Friday that it will require CRH and its US subsidiary to divest an aggregate quarry in Rocky Gap, Virginia, to proceed with its proposed acquisition of Pounding Mill Quarry Corporation. The move came after the Department’s Antitrust Division filed a civil antitrust lawsuit to block the proposed transaction, while the Department filed a proposed settlement.
“Today’s structural settlement resolves both horizontal and vertical competition concerns,” Assistant Attorney General Makan Delrahim of the Antitrust Division commented in the statement, adding that as a result of the proposed transaction, the FTSE 100 group would have ended up owning “nearly all of the aggregate quarries that supply southern West Virginia”.
Analysts on FTSE 100 group
As of June 22, the consensus forecast amongst 25 polled investment analysts covering CRH for the Financial Times has it that the company will outperform the market. According to MarketBeat, the Irish building materials group currently has a consensus ‘buy’ rating and an average price target of 3,059p.