Cement giant Holcim's shares soar after N. America spinoff news
Source: AFP
PAY ATTENTION: The 2024 Business Leaders Awards Present Entrepreneurs that Change Nigeria for the Better. Check out their Stories!
Shares in Swiss construction giant Holcim surged on Monday after it announced plans to fully spin off its North America business.
Holcim's share price jumped more than five percent at the open on the Swiss stock exchange before paring back some gains to trade 4.8 percent higher at 67.28 Swiss francs ($78.13) in morning deals.
The hike came a day after the company announced plans to list its North American business in the United States during the first half of 2025 "with full capital market separation".
It said it would communicate about the final structure later this year, but said the move would create a leading pure-play North American building solutions company.
Holcim, one of the world's largest cement makers, also announced Sunday that its board had picked Miljan Gutovic, who currently heads Holcim's European operations, to replace Jan Jenisch as chief executive officer from May 1.
Jensich, who has headed Holcim since 2017, will remain on as chairman of the group and will lead the US listing process, the company said.
PAY ATTENTION: Click “See First” under the “Following” tab to see Legit.ng News on your Facebook News Feed!
Holcim is currently the largest cement maker in North America, where it counts 850 sites.
Jensich told reporters Sunday that once spun off, the new company could be valued at around $30 billion, adding that Holcim was not planning to hold onto a stake.
Jenisch highlighted that North America had been Holcim's best developing business in recent years.
"It's a rock star business," he said, pointing out that it had been growing sales by more than 20 percent each year for the past four years.
"This is simply too successful to be run as a subsidiary."
Holcim said the new US business would aim to nearly double its current sales of around $11 billion to over $20 billion by 2030.
Holcim, which merged in 2015 with French group Lafarge, has significantly increased its footprint in North America in recent years through a string of acquisitions.
The company dished out $3.4 billion in 2021 to buy US roofing manufacturer Firestone Building Products (FSBP).
In 2022 it bought Malarkey Roofing Products for $1.35 billion, and a year later it snapped up Duro-Last for $1.29 billion.
Analysts hailed the spinoff plan, with Mark Diethelm of Swiss investment manager Vontobel describing it as "the next step for growth and value creation".
In a research note, he hailed that the company had not, as some investors had expected, slowed down the pace of its transformation after the "significant M&A activity in the last three years".
"The company's intention to spin-off its North American business demonstrates the company's focus on value creation," he said.
PAY ATTENTION: Unlock the best of Legit.ng on Pinterest! Subscribe now and get your daily inspiration!
Source: AFP
