CRH to buy Indian rival

CRH is set to acquire Indian cement company Sree JayaJothi, the ‘Economic Times’ of India reported yesterday.

Sree JayaJothi is the cement-making arm of the $9bn (€6.8bn) Shriram Group.

CRH has flourished thanks to small bolt-on acquisitions such as this. Over the past 42 years, it has grown from a small, mainly Irish-based cement and aggregates producer to being one of the world’s largest building materials companies, with 2012 sales of €18.6bn and operating profits of €845m.

“The deal is likely to be announced shortly. CRH is set to purchase the target through its joint venture with MyHome Industries Ltd,” a source told the Indian newspaper.

Sree JayaJothi has a cement manufacturing facility at Kurnool,Andhra Pradesh, with a combined clinkerisation capacity of two million tons per annum and cement-grinding capacity of 3.2 million tons per annum, the newspaper added. The location will provide cost benefits to CRH and is close to the Bangalore market.

“There is a lot of interest from both strategic and financial investors in the cement sector. However, high valuation expectations of the Indian promoters are a hurdle for any sizeable deal to happen,” the newspaper quoted analyst Anil Khatri as saying.

“The Shriram EPC deal may turn out to be an ice-breaker.” Source: Irish Independent