CRH favourite in bid to buy top German building materials firm
CRH recently made it to the second round of bidding for the group, but Irish analysts played down the prospect of a deal, pointing out that traditionally the Irish group has done deals one-to-one.
Dublin-based CRH is the only trade bidder to make it to the second round at the end of May.
CRH, PAI, Cinven, BC Partners and a bid fronted by Permira are understood to be the five in the final shakeout, according to Reuters.
CRH produces calcium silicate, gypsum and basic lime and would face less regulatory hurdles than rivals like Weinerberger.
Xella employs more than 7,000 people and previous market speculation put a price of e2 billion on Xella, but Goodbody Stockbrokers said the figure was excessive compared with first-half profits before tax last year of just e79m.
Goodbody said CRH has avoided bid battles in the interest of keeping prices competitive and this year has already spent close to e1bn on acquisitions.
Several bankers expressed surprise that the German company was going ahead with the sale in the face of a possible real estate meltdown.
“Whatever you think, the timing is odd,” they said.
They point out that Germany has lagged Europe’s real estate boom in recent years, especially its housing market.
Consequently, it is seen by analysts as less vulnerable to a downturn now the property investment climate has turned sour.
