Yahoo Finance Building giant CRH says major buyer interest in Europe distribution arm
Irish building materials giant CRH (CRG.IR) said on Thursday that “a lot” of buyers are interested in acquiring its European distribution division, which is valued at around €2bn (£1.7bn).
Bank of America is overseeing the process surrounding the potential sale of the division, which is expected to begin next month.
The company, which is the largest buyer of cement in the world, put the division under review in 2018.
Leading private equity firms Advent, Lone Star, and CVC have all expressed interest in the purchase of the division, according to reports. CRH’s European distribution division operates in Germany, France, the Netherlands, and Switzerland, among other countries.
"We've had a lot of people interested. It's an area that there has been a lot of interest in — the distribution space. Private equity have been involved in this space for a decade," CRH CEO Albert Manifold said on Thursday, following the company's AGM.
Manifold said the company would weigh the potential value of holding onto the unit, whose fortunes he said were “improving,” against the price offered by potential bidders.
CRH has become known for offloading divisions it feels are not delivering high enough returns, and has set high earnings targets for the coming years.
CRH sold Allied Building Products, a similar US distribution business, for $2.6bn (£2bn) in 2017.
On Wednesday, the firm reported a 7% jump in sales in the first quarter of 2019, boosted by an upswing in its European materials division.
Manifold said this period was the first time in 15 years that the firm was able to increase cement prices across Europe.
But he also said that, in the context of Brexit, his company had noticed that the approval of large Irish government-funded infrastructure projects was taking longer than usual.
