HeidelbergCement Explores $1.5 Billion U.S. Asset Sale
(Bloomberg) -- HeidelbergCement AG is exploring the sale of U.S. assets as Chief Executive Officer Dominik von Achten seeks to divest peripheral businesses, according to people familiar with the matter.
Germany’s largest cement maker is working with Morgan Stanley on the sale of the operations in California, the people said, asking not to be identified because discussions are private. The unit could fetch around $1.5 billion, the people said.
HeidelbergCement’s advisers recently sent initial marketing documents to potential buyers, according to the people. They have approached rivals including Martin Marietta Materials Inc., Cemex SAB, CRH Plc, Summit Materials Inc. and LafargeHolcim Ltd., as well as other cement makers in emerging markets like China and Latin America, they said.
Shares of HeidelbergCement rose for a second day on Wednesday. They were up 2% at 9:10 a.m. in Frankfurt, hitting the highest intraday level since February and giving the company a market value of about 12.4 billion euros ($15.1 billion).
The company is expected to receive first-round bids early next year, the people said. It’s too early to say which of the potential buyers will submit proposals, and HeidelbergCement could opt to keep the business if offers come in too low, according to the people.
Representatives for HeidelbergCement, Morgan Stanley and LafargeHolcim declined to comment. Spokespeople for Martin Marietta Materials, Cemex, CRH and Summit Materials didn’t immediately respond to requests for comment.
HeidelbergCement plans to review its portfolio and discontinue operations in some markets that don’t have favorable prospects, von Achten said in an October interview with Germany’s Handelsblatt newspaper. The California assets include cement plants as well as facilities that produce aggregates, the people said.
The divestment would help HeidelbergCement focus on the East Coast, Midwest and Canada, one of the people said. Potential buyers could use the opportunity to expand their presence on the West Coast or reap cost savings by combining with existing operations.
Like the rest of the industry, HeidelbergCement has seen slowing sales as the coronavirus pandemic delayed construction projects around the world. It also faces uncertainty around Brexit, which has made the U.K. a weak spot for the company.
In July, HeidelbergCement announced a 3.4 billion-euro writedown. Most of the impairments came from operations it acquired as part of the 2007 purchase of the U.K.’s Hanson Plc.
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