Amid U.S. construction boom, world’s largest cement maker will spin off North American business, seek $30B valuation: 'Two independent champions'
Holcim Ltd., the world’s largest cement maker, said Sunday it plans to separate its fast-growing North American business to pave the way for a listing next year in the US valued at more than $30 billion.
The Swiss maker of building materials also named its European head, Miljan Gutovic, as chief executive officer. He will replace Jan Jenisch, who will remain chairman. The executive move is effective May 1.
A valuation over $30 billion is in “the right ballpark” for the unit, Jenisch said in a conference call after the announcement. Holcim shares soared 38% last year, reaching the highest level since 2015 in December. They closed Friday at 64.20 francs.
The spinoff “should be a very value-creating move from our side for our shareholders,” Jenisch told reporters. “We now make two independent champions.”
The separation unwinds a period of acquisitions around the globe for Zug, Switzerland-based Holcim, triggered by diverging regulatory regimes in North America and Europe. North America accounted for $11 billion of revenue last year, according to Jenisch. In 2022, the region generated more than a third of the company’s revenue.
The US market is growing at a rapid pace as builders race to relieve a chronic lack of single-family homes and meet regulatory pressures for more energy-efficient buildings. The unit expanded through an acquisition spree that broadened its offering of building materials.
Listing 100% of the business on the New York Stock Exchange is expected to take about 15 months, Jenisch said. Under the current plan, every Holcim shareholder would get shares following the transaction — one in the European operations and one in the US.
Management including the US CEO will be decided between now and the first half of 2025, he added.
“I will make a decision later on which position is there for me,” he said when asked about a possible future role in the US business.
Under Jenisch’s leadership, Holcim agreed to buy Duro-Last Inc., a US maker of commercial roofing systems, in a deal last year valued at $1.3 billion, and acquired Bridgestone Corp.’s Firestone Building Products unit in 2021 for $3.4 billion.
Gutovic has been a member of Holcim’s executive committee since 2018 and led the company’s drive to reduce its carbon emissions. Previously, he worked at Swiss specialty chemical company Sika AG in various management roles.
Since joining the company in 2017, Jenisch has pivoted the company away from traditional cement as builders face increasing pressure to lower their carbon footprint. At the same time, Holcim exited cement activities in some emerging markets, including the sale of its Indian operations to billionaire Gautam Adani for $6.4 billion.
Earlier this month, Gutovic said Holcim is looking at another 20 bolt-on acquisitions in 2024 and doesn’t exclude another transformational deal. Holcim is expected to report earnings on Feb. 28.
— With assistance from Bastian Benrath
