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Summit Materials bids for Ash Grove Cement: Reuters
Posted on Friday, 06 October 2017 14:01
US cement manufacturer Summit Materials has submitted an approach for Kansas-headquartered peer Ash Grove Cement, according to Reuters.
Citing people with knowledge of the matter, the news provider said the suitor offered to pay USD 3.80 billion for the business in a bid which was lodged yesterday.
The sources noted that Ash Grove’s board is currently considering the approach.
However, if Summit hopes to acquire the company it will undoubtedly have competition as it is not the first potential buyer to have expressed an interest in the firm in recent weeks.
On 20th September, Irish concrete maker CRH submitted a bid of its own; it offered to pay USD 454.00 per item of stock, thereby valuing the group at USD 3.50 billion, including debts.
At the time, Ash Grove’s board approved the deal, which was expected to close in late 2017 or early 2018.
However, following Summit Materials throwing its hat into the ring it is very possible that a bidding war could be about to ensue.
According to its website, Ash Grove is a leader in its field and has a history dating back more than 135 years.
The company employs some 2,700 people and claims to be the fifth largest company of its kind in the US, operating eight cement plants, 25 cement terminals and 52 ready-mixed plants, among other locations, throughout the country.
Ash Grove has yet to officially confirm that Summit Materials is the other interested bidder, but it did release a statement saying that a preliminary, non-binding proposal valuing the group at between USD 3.70 billion and USD 3.80 billion had been received.
According to Zephyr, the M&A database published by Bureau van Dijk, CRH’s bid for Ash Grove is the largest deal targeting a cement manufacturer to have been announced worldwide during 2017 to date.
In all, 107 such transactions have been signed off since the beginning of January; others targeted include China-based Anhui Conch Cement, South Korea-headquartered Hyundai Cement and Thailand player Siam City Cement.
© Zephus Ltd