The acquisition of €6.5 billion worth of assets might have prompted fears of integration indigestion but the market has resisted the temptation to reach for the Tums. Shares in £12.4 billion Irish aggregates giant CRH (CRH) jump 4.7% to £16.79 in trading today, pleased by the creative, if complex, deal.
Analysts at Exane BNP Paribas perhaps best sum-up the attractions of the purchase from the merging Philippines cement maker Holcim (HLCM:PS) and French industrial giant Lafarge (LAFP:PA). They explain that CRH appears to have bought a 14% earnings before interest, tax, depreciation and amortisation (EBITDA) margin business, partly funded by flogging a 6% margin European products business.
This is by miles the biggest acquisition attempted by the Irish building materials group, dwarfing the multiple bolt-on deals of the past. Funded by a combination of €2 billion cash, new debt and a 9.99% equity placing, it also catapults CRH to third in the global building materials industry.
Once the deal goes through it will boost the building materials firm's capacity by more than a third thanks the extra production sites situated across no fewer than 11 countries, including Brazil, the Philippines and Canada. Whether that adds up to anything of consequence for shareholders, only time will really tell.