By Rachel More
BERLIN (Reuters) -Heidelberg Materials said on Thursday it has struck a deal to buy Giant Cement Holding and its subsidiaries for $600 million, the latest acquisition by the German cement maker to expand its foothold in the U.S.
Heidelberg (ETR:) Materials, the world’s second-largest cement maker, and its larger peer, Holcim (SIX:), have singled out the U.S. market as a place to grow aggressively, banking on what they say will be prolonged construction activity due to infrastructure projects and economic stimulus.
Shares of European construction firms have risen on hopes that President-elect Donald Trump’s administration could be positive for U.S. construction activity.
“The acquisition … will further strengthen our cement footprint in the growing Southeastern U.S. and New England markets,” said Chris Ward, the CEO of Heidelberg Materials North America.
The transaction, which will be completed in the first quarter of 2025, is expected to contribute around $60 million in earnings before interest, taxes, depreciation and amortisation in the first year of operation, “before significant additional synergies”, the company said in a statement.
The German company bought three U.S. companies in June for $380 million in total.
“The valuation (10x forward EBITDA) is not cheap, but the U.S. market has an attractive structure and growth potential,” Davy Research wrote in a note.
Shares in Heidelberg Materials were up more than 1%.
Heidelberg Materials scaled back its American presence three years ago when it sold cement factories in the western U.S. for $2.3 billion.
Giant Cement Holding is owned by Mexican billionaire Carlos Slim’s Spanish cement and real estate unit Inmocemento, which will book a capital gain of $145 million on the asset sale, the Spanish company said in a separate filing to the Spanish stock market regulator.
Grupo Carso, another Slim holding based in Mexico, said in a filing the deal required the spin-off of Keystone Cement Company and some non-operating plots of land belonging to other units.
Inmocemento was spun off from Slim’s Spanish conglomerate FCC (BME:) earlier this month. Inmocemento shares were up more than 6.5% at the close of trading on Thursday.
