CRH closes in on Dutch firm in €646m swoop

CRH, the building materials giant, plans to buy the Dutch company, Cementbouw for €646 million.

The deal was cleared by the European Commission yesterday together with a joint venture investment with Cementbouw’s parent company, CVC Capital Partners.

The acquisition brings CRH’s cumulative spend on acquisitions and investments to over €1.2 billion for 2003.

Cementbouw and CRH produce and trade building materials. Both are also active in the DIY and builders’ merchant retail businesses.

Cementbouw is controlled by CVC Capital Partners Group, an investment funds company. As Cementbouw’s turnover is almost exclusively generated in The Netherlands the commission found the competitive impact of the concentrations is limited to that country.

Its market investigation showed the new company would continue to face strong competition in the areas of paving material, construction flooring, load- bearing wall materials, builders’ merchandising and DIY retail.

Its findings were similar for the joint venture which will produce fly ash, a cement substitute.

CRH says Cementbouw had a combined distribution and building products reported operating profit of €73m on sales of €790m last year after charging depreciation of €27m.

After allowing for revaluation of fixed assets, the net assets to be acquired are estimated to amount to approximately €354m giving rise to estimated goodwill of €292m.

Cementbouw’s Distribution operations are concentrated in the north of Holland while CRH’s existing operations in the country are mainly southern.

Cementbouw’s DIY division is the second largest Intergamma franchisee, operating a total of 54 GAMMA and Karwei stores.

Combining these stores with CRH’s 75 GAMMA/ Karwei outlets in Benelux will result in annual DIY sales for the enlarged group of over €650m.