CRH Offers to Buy Australian Adbri in $1.4 Billion Deal

Building Materials Leader Seeking Purchase of Concrete Maker
Australian stock exchange
Pedestrians walk past an electronic stock board at the ASX Ltd. exchange center in Sydney, Australia. (David Moir/Bloomberg News)

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Global building materials group CRH Plc has offered to purchase Australian concrete maker Adbri Ltd. in a joint takeover proposal with Barro Group, valuing the target business at A$2.1 ($1.4 billion), or a 41% premium to its closing share price on Dec. 15.

CRH Americas ranks No. 2 on the Transport Topics list of the largest building materials carriers in North America, which is based on tractor count. The company ranks No. 23 on TT’s Top 100 list of the largest private carriers in North America.

ASX-listed Adbri has entered an exclusivity deed with CRH and resources and manufacturing firm Barro to progress the deal. Adbri said in a statement Dec. 18 that its Independent Board Committee would “unanimously recommend the proposal,” subject to a binding scheme implementation agreement on terms acceptable to all parties.

The nonbinding indicative proposal for A$3.20 per share compares to the A$2.27 closing price for the stock on Dec. 15. Any transaction would require approval from Australia’s Foreign Investment Review Board and also is subject to CRH obtaining joint bid relief from Australia’s securities regulator.

The agreement would give CRH an interest in the Adbri shares owned by the Barro Group, which represents 42.7% of the issued capital, Adbri said in a statement disclosing terms of the proposal.

Shares in Adbri rose 8.6% on Dec. 15 and are up 37.2% this year but remain two-thirds below their peak of 2018.

Before the deal, Citi analysts placed a neutral outlook on Adbri’s shares, in part because of a predicted slack in homebuilding.

“While improving profitability and cash flow is supportive for the stock in the near term, we continue to expect residential volumes to soften,” analysts Samuel Seow and Aashita Bharadwaj wrote.

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