Heidelberg Materials Enlarges U.S. Footprint with Giant Cement Acquisition

Scott Peters
28 Nov, 2024
New York City

Heidelberg Materials AG advanced 1% to €118.85, and the German cement company agreed to acquire the US-based Giant Cement and its subsidiaries for $600 million. 

Inmocemento SA gained 5.4% to €3.16, and the Mexican billionaire Carlos Slim-controlled company said its subsidiary, Cementos Portland Valderrivas, will sell its 45% stake in Giant Cement Holding to Heidelberg Materials North America. 

The transaction is expected to bring a cash inflow of about $200 million and a capital gain of $145 million for CPV. 

The transaction is expected to be accretive from the first year, and add $60 million to operating earnings before "significant additional synergies." 

The deal is anticipated to be finalized in the first quarter of 2025.

In the deal, the company acquired a cement production plant, located in South Carolina, with an annual capacity of 800,000 tons, a network of four cement distribution terminals in Georgia and South Carolina, as well joint-venture deep water terminal in Savannah, Georgia. 

The cement plant is known for its use of waste-derived fuel facility, and the deal also includes alternative fuel recycling business with four facilities in the Eastern U.S. 

The transaction also includes a deep water terminal in Boston, Massachusetts and a distribution terminal in Newington, New Hampshire.  

The purchase price for the cement facility and other subsidies is not cheap, but the company held out for future growth because of rising investment in construction and infrastructure projects. 

Heidelberg last month commenced the sale of its cement operation in India to Adani Group for $1.2 billion, but at the time said it plans to move away from cement to higher value-added building materials businesses. 

Heidelberg and its larger Swiss rival Holcim AG have been ramping up their activities in the U.S. as the world's largest economy ramps up infrastructure building. 

Earlier in the year, in June, Heidelberg acquired three cement and building materials companies in the U.S. for $380 million.