CRH rival Lafargeholcim eyes US deals following Europe success
CRH rival Lafargeholcim is eyeing 10 acquisitions this year on the back of stronger-than-expected first quarter earnings and increased customer demand in the European cement market.
Lafargeholcim expects to increase the number of small acquisitions it makes this year after buying four businesses so far in 2019.
“We are trying to get a more dynamic start to the process to do bolt-ons this year”, chief executive Jan Jenisch said, noting that Lafargeholcim had already made the same number of deals as it had during the whole of 2018.
“We are going to see hopefully 10 plus of those acquisitions for the year overall,” he said.
“Geographically we are very keen to expand in the US market, especially when you look in aggregates and concrete where we have a market share in the low single digits there. In Europe and Australia we are following up on various opportunities,” said Mr Jenisch.
Lafargeholcim is the world’s largest cement maker. It said its first-quarter operating profit rose nearly 16%, helped by a strong performance in Europe.
The company reported core operating profit of 809 million Swiss francs (€716m) for the three months, better than market expectations of 754m francs. Sales increased 2.2% to 5.96bn francs, just ahead of expectations.
Lafargeholcim said it expects demand to continue rising this year, pushing aside concerns about slowing economies and trade tensions weighing on the construction industry.
CRH boosted its status to the world’s third largest building materials company when it spent €6.5bn on a chunk of Lafarge and Holcim assets ahead of their 2015 merger. The Irish group recently reported record annual earnings, for 2018, but has attracted investment from Europe’s largest activist investor Cevian Capital.
CRH’s share price is also lagging that of its largest peer, down nearly 4.5% in the past 12 months versus Lafargeholcim’s 0.5% reverse.
