CRH 'prepares to sell €1.7bn distribution arm'

CRH 'prepares to sell €1.7bn distribution arm'
Albert Manifold, Chief Executive, CRH

Geoff Percival and Eamon Quinn

Building materials group CRH is reportedly closing in on a €1.7bn sale of its European Distribution business to private equity fund Blackstone.

CRH has had the European division under review since last year and said at the time of its annual shareholders' meeting in April that it would decide within three months whether or not to sell it.

According to the report, Blackstone has beaten rival private equity bidders to the business - which sells plumbing and flooring supplies to building firms - and a deal could be announced this week.

Shares in CRH were up slightly before the news broke.

The shares have, however, been under pressure for some time and have made only a negligible return for its investors in the past year.

The €23.6bn company which is one of a handful of Irish-owned multinationals has been targeted by so-called activist shareholder Cevian Capital, which has pressed for big changes at CRH to boost the returns for shareholders.

CRH shares surged in February when the fund first revealed it had a stake in CRH.

The Stockholm-based fund which has about €13bn of assets under management is “convinced that CRH’s assets could become significantly more valuable”, the fund's boss said at the time.

The reported sale will likely be seen as a response by CRH to the stake-building by the activist shareholder.

Last month, CRH announced that Andrew Keating, the longtime financial group head at Bank of Ireland, was joining the building products firm.

CRH chief executive Albert Manifold recently said the group views Cevian like any other shareholder and welcomes the views of all key investors.

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