LafargeHolcim Is in Talks to Buy Firestone Building Products
(Bloomberg) -- LafargeHolcim Ltd., the world’s largest cement maker, is in advanced talks to acquire Bridgestone Corp.’s Firestone Building Products unit, people with knowledge of the matter said.
The Swiss company could reach an agreement as soon as this week, the people said, asking not to be identified because the information is private. Negotiations could still be delayed or fall apart, according to the people.
Firestone Building Products was expected to fetch more than $2.5 billion, Bloomberg News reported previously. The Bridgestone unit, part of the Japanese industrial conglomerate’s North American division, makes roofing systems for commercial markets.
If LafargeHolcim reaches an agreement, it would mark a pivot from the cost-cutting and sales of non-core assets overseen by Chief Executive Officer Jan Jenisch. He signaled as recently as October that the cement maker, which reported stronger-than-expected quarterly earnings, was in a position to do deals.
“A potential acquisition in this space should also boost the ESG credentials of the company as a supplier of energy saving products in the building and construction sector,” Citigroup Inc. said in a note on Tuesday.
LafargeHolcim shares gained 0.3% in Zurich, valuing the company at about 30 billion Swiss francs ($35 billion).
A representative for Bridgestone said the firm is exploring opportunities to unlock value for employees, customers and shareholders and to support the Firestone unit’s long-term growth plan. A representative for LafargeHolcim declined to comment.
Kingspan Group Plc and Standard Industries Inc. were among final suitors for Firestone Building Products before dropping out of the bidding, people with knowledge of the matter have said.
The departures of Kingspan and Standard Industries, both serial dealmakers, and the emergence of LafargeHolcim as the leading contender came as a surprise, given that the Bridgestone unit is outside of its core cement business.
A potential purchase comes as a surprise because Firestone Building Products offers “very little overlap” with LafargeHolcim’s main cement and aggregates focus, Morgan Stanley wrote in a note.
©2021 Bloomberg L.P.