Scheme of Arrangement Approval for Proposed Adbri Acquisition

Rhea-AI Summary

CRH plc, a leading provider of building materials solutions, announced the approval of the Scheme of Arrangement for the acquisition of Adbri by its Independent Shareholders on June 12, 2024. The approval was followed by Court consent on June 14, 2024.

Under the Scheme, CRH will acquire the remaining 57% of Adbri's ordinary shares not owned by Barro Group for A$3.20 per share. This values Adbri at A$2.1 billion on a 100% basis and the 53% share capital at A$1.1 billion. All transaction conditions, including FIRB approval, have been met, with completion expected by July 1, 2024.

Albert Manifold, CRH's CEO, highlighted Adbri's quality assets and market positions that align with CRH's core competencies and growth plans in Australia. The partnership with Barro aims to enhance Adbri's long-term growth and performance.

Positive

• Approval of Scheme of Arrangement by Independent Shareholders on June 12, 2024.
• Court approval secured on June 14, 2024.
• CRH to acquire remaining 57% of Adbri's shares at A$3.20 per share.
• Total equity valuation of Adbri set at A$2.1 billion.
• Valuation of 53% share capital at A$1.1 billion.
• All transaction conditions, including FIRB approval, satisfied.
• Completion of the acquisition expected by July 1, 2024.
• Albert Manifold highlights Adbri's high-quality assets and market positions.
• Acquisition expected to complement CRH's core competencies and growth strategies in Australia.

Negative

• No mention of immediate financial benefits or revenue impact for CRH.
• Potential integration risks with Adbri's existing operations.

Insights

Financial Analyst

The approval of the Scheme of Arrangement for the acquisition of Adbri by CRH and the Barro Group signifies a strategic expansion in the Australian market for CRH. The agreed cash consideration of A$3.20 per share places the equity valuation at A$2.1 billion and represents a significant investment aimed at consolidating CRH's footprint in the cement, concrete and aggregates sectors. This transaction underlines CRH’s confidence in Adbri's high-quality assets and market positions. The Foreign Investment Review Board (FIRB) approval indicates regulatory hurdles have been cleared, paving the way for a smooth integration. For investors, this move is poised to offer synergy benefits and potential cost-saving opportunities in the long run. The immediate impact may include a positive market response to CRH's shares due to the perceived growth prospects and strategic fit.

Market Research Analyst

From a market perspective, CRH’s acquisition of Adbri could be evaluated as a strategic attempt to bolster market share in the Australian market. Adbri's established market positions in cement and concrete will likely provide CRH with competitive advantages, enabling more robust market penetration and diversification. The acquisition also suggests potential scalability and operational efficiencies that can be leveraged to drive profitability. A focal point for investors is how this transaction will enhance CRH’s ability to serve the Australian market more effectively and possibly tap into new customer segments.

Legal Expert

With the Court’s approval of the Scheme on June 14, 2024 and prior clearance from the Foreign Investment Review Board, all legal and regulatory prerequisites have been satisfied. This approval ensures regulatory compliance and eliminates potential legal barriers, facilitating a seamless acquisition process. For investors, this legal endorsement is a positive signal that reduces risks associated with regulatory uncertainties. It also underscores the due diligence performed by CRH and Barro, which is important for maintaining investor confidence in cross-border transactions of this magnitude.

NEW YORK--(BUSINESS WIRE)-- CRH plc (NYSE: CRH), the leading provider of building materials solutions, is pleased to announce that Adbri’s Independent Shareholders approved the Scheme of Arrangement (the “Scheme”) under which CRH and the Barro Group (“Barro” and together with CRH the “Partners”) will acquire Adbri Ltd. (“Adbri”) at the Scheme Meeting held on June 12, 2024. The Scheme subsequently received Court approval on June 14, 2024.

Under the approved Scheme, CRH will acquire the remaining 57% of the ordinary shares of Adbri not owned by Barro for the previously agreed cash consideration of A$3.20 per share. The Offer values Adbri at an equity valuation of A$2.1 billion (US$1.4 billion) on a 100% basis and values the approximately 53% of issued share capital that the Partners do not currently have an interest in and which CRH has agreed to acquire at A$1.1 billion (US$0.7 billion). Having previously secured Foreign Investment Review Board (FIRB) approval, all conditions to the transaction have now been satisfied and based on the current timetable for implementation, completion is expected to occur on July 1, 2024.

Albert Manifold, Chief Executive of CRH, said: “We are pleased to receive Independent Adbri Shareholder and Court approval for the proposed acquisition of Adbri in partnership with the Barro family. Adbri is an attractive business with high-quality assets and leading market positions that complement our core competencies in cement, concrete and aggregates while creating additional opportunities for growth and development for our existing Australian business. We look forward to working with the Barro family over the coming years to enhance the long-term growth and performance of Adbri.”

About CRH

CRH (NYSE: CRH, LSE: CRH) is the leading provider of building materials solutions that build, connect and improve our world. Employing approximately 78,500 people at approximately 3,390 operating locations in 28 countries, CRH has market leadership positions in both North America and Europe. As the essential partner for transportation and critical utility infrastructure projects, complex non-residential construction and outdoor living solutions, CRH’s unique offering of materials, products and value-added services helps to deliver a more resilient and sustainable built environment. The company is ranked among sector leaders by Environmental, Social and Governance (ESG) rating agencies. A Fortune 500 company, CRH’s shares are listed on the NYSE and the LSE.

Forward-Looking Statements

This document contains statements that are, or may be deemed to be, forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995.

These forward-looking statements may generally, but not always, be identified by the use of words such as "will", "believe", "continues", "is expected to", “intends to” or similar expressions. These forward-looking statements include all matters that are not historical facts or matters of fact at the date of this document.

This document contains statements that are, or may be deemed to be, forward-looking statements with respect to the business and future performance of CRH and certain of the plans and objectives of CRH, including but not limited to statements regarding plans and expectations in connection with the Scheme and CRH’s partnership with Barro; plans and expectations related to completion of the transaction; and plans and expectations regarding the benefits of the proposed transaction and CRH’s presence in Australia.

Forward-looking statements are subject to risks, uncertainties and other factors because they relate to events and depend on circumstances that may or may not occur in the future and/or are beyond CRH's control or precise estimate.

There are important factors, risks and uncertainties that could cause actual outcomes and results to be materially different, including risks and uncertainties relating to CRH described in Item 1.A – Risk Factors of CRH’s Annual Report on Form 10-K for the year ended December 31, 2023 and CRH’s other filings with the U.S. Securities and Exchange Commission. You are cautioned not to place undue reliance on any forward-looking statements. These forward-looking statements are made as of the date of this document. CRH expressly disclaims any obligation or undertaking to publicly update or revise these forward-looking statements other than as required by applicable law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240613209343/en/

Albert Manifold, Chief Executive

Jim Mintern, Chief Financial Officer

Frank Heisterkamp, Director of Capital Markets & ESG

Tom Holmes, Head of Investor Relations

ir@crh.com

Source: CRH plc

FAQ

What is the significance of the Scheme of Arrangement approved by Adbri's Independent Shareholders?

The Scheme of Arrangement approval is important as it allows CRH to proceed with acquiring the remaining 57% of Adbri's ordinary shares, marking a significant step in the acquisition process.

When did the Court approve the Scheme of Arrangement for CRH's acquisition of Adbri?

The Court approved the Scheme of Arrangement on June 14, 2024.

What is the cash consideration per share under CRH's acquisition of Adbri?

CRH will acquire Adbri shares at a cash consideration of A$3.20 per share.

How much is Adbri valued at under the acquisition agreement with CRH?

Adbri is valued at A$2.1 billion on a 100% equity basis.

What is the total valuation of the 53% share capital of Adbri that CRH will acquire?

The 53% share capital is valued at A$1.1 billion.

When is the completion of CRH's acquisition of Adbri expected?

The acquisition is expected to be completed by July 1, 2024.

What are the expected benefits of CRH acquiring Adbri?

The acquisition is expected to complement CRH's core competencies in cement, concrete, and aggregates, and drive growth in its Australian operations.