ZURICH (Reuters) – Switzerland's Holcim plans to spin off 100% of its North American business from its New York flotation business, potentially valuing the business at $30 billion, the building materials giant said in a new statement on Sunday. The company also announced the appointment of a new CEO.
According to Holcim, one of the world's largest cement manufacturers, Mirjan Gutovic, currently Holcim's head of Europe, will replace Jan Jenisch as CEO from May 1. He will be appointed.
The cement giant's Swiss-listed shares rose nearly 4% on Monday on the news.
Holcim's restructuring is the biggest since the Swiss company acquired French rival Lafarge in 2015, with the sale likely to be completed in the first half of 2025.
Jenisch told reporters that the spinoff could be worth about $30 billion and that Holcim would have no stake.
“We intend to completely separate our North American business from the capital markets and list 100% of our business on the New York Stock Exchange,'' Jenisch said, expressing confidence that we will have shareholder support for the floatation. had.
The company said it aims to increase annual sales from the current roughly $11 billion to more than $20 billion and generate operating profits of more than $5 billion by 2030.
Holcim's remaining global operations (Europe, Latin America, Africa and Asia) will remain listed on Switzerland's blue-chip SMI index and will focus on building solutions such as roofing products.
Jenisch, who has led Holcim since 2017, will remain chairman and lead the company's plans to list in the U.S., where earnings multiples are higher for building materials companies than in Europe, potentially boosting the company's valuation.
Analysts are positive about the listing, which could be the largest in the construction industry in many years.
“Transatlantic synergies are limited, so to me it makes sense,” said Martin Hüssler, an analyst at Zecher Kantonalbank.
“Competitors in the building materials industry in the U.S. have higher evaluations than Holcim, so we view Holcim positively.”
The deal had been long planned and came about because Holcim believed its North American business was undervalued compared to peers such as Carlyle, RPM and James Hardy, the people said.
Holcim North America's operating profit was just 7x, well below the 10-15x of its peers.
Jenisch described the US as one of the world's most attractive construction markets and said the move would help the new company capitalize on the region's infrastructure and construction boom.
Holcim is North America's largest cement manufacturer, with 16,000 employees at 850 locations. The business competes in the region with companies such as Carlyle and RPM in building products and solutions, and with companies such as Eagle Materials and Summit Materials in the cement industry.
The North American business accounted for a quarter of Holcim's sales in the first nine months of 2023 and is also the company's most profitable region, with sales increasing by more than 20% on average in recent years. The remaining Holcim business will have sales of approximately CHF 17 billion ($19.69 billion) and 48,000 employees.
The U.S. business was “too successful to be run as a subsidiary,” Jenisch said.
(Reporting by John Revill; Additional reporting by Anirban Sen; Editing by Bernadette Bohm and Christopher Cushing)
