CRH Weighs Sale of Philippines Arm to Raise Cash
CRH Weighs Sale of Philippines Arm to Raise Cash
(Bloomberg) -- CRH Plc, which counts activist investor Cevian Capital as a shareholder, is considering a sale of its Philippines cement business as the Irish building-materials giant seeks to raise cash by selling non-core assets, according to people familiar with the plan.
JPMorgan Chase & Co. is helping CRH find a buyer for the operation, which could be valued at between $2 billion and $3 billion, the people said, asking not to be named as the matter is private. The Dublin-based company and its adviser are sounding out bid interest fro plm Asia and Europe, they said.
A disposal of the Philippines activities would come after CRH agreed in July to sell its European plumbing and heating distribution business to Blackstone Group Inc. for 1.64 billion euros ($1.8 billion) in cash. Chief Executive Officer Albert Manifold is seeking to create a more focused building-materials group while generating cash for acquisitions.
CRH entered the Philippines in 2015 when it acquired Republic Cement, the second largest cement producer in the country, according to its website. The deal was part of a $7.2 billion spree on assets that Holcim Ltd. and Lafarge SA had to sell as part of their merger. CRH teamed up with local conglomerate Aboitiz Equity Ventures for the acquisition.
Shares of CRH reversed earlier losses of as much as 1.2% and closed 0.9% higher at 33.69 euros in the Irish capital. The stock has surged 46% this year, giving a market value of 26.7 billion euros.
The company has five plants in the Philippines with an annual cement capacity totaling 7.5 million metric tons. The disposal plan is at a preliminary stage and no final decision has been made on a sale, the people said.
Representatives for CRH and JPMorgan declined to comment.
The Philippines has seen consolidation in its cement market amid tough price competition. Earlier this year, San Miguel Corp. agreed to acquire an 85.7% stake in Holcim Philippines Inc. from entities controlled by LafargeHolcim Ltd. for an enterprise value of $2.15 billion.
To contact the reporters on this story: Aaron Kirchfeld in London at akirchfeld@bloomberg.net;Manuel Baigorri in Hong Kong at mbaigorri@bloomberg.net
To contact the editors responsible for this story: Fion Li at fli59@bloomberg.net, ;Anthony Palazzo at apalazzo@bloomberg.net, Christopher Jasper, Andrew Noël
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