Irish building materials company CRH has made a cash bid for cement maker Pretoria Portland Cement (PPC), adding a new twist to the battle for South Africa’s largest cement maker.
PPC has a market value of 10.1 billion rand.
The South African cement maker said Monday that it has received a non-binding expression of interest from CRH plc. But it did not disclose the value of CRH’s non-binding offer.
Other companies that have shown interest to acquire PPC include Fairfax Financial, Franco-Swiss building materials group LafargeHolcim and Dangote Cement. But the latter changed its mind saying it was not ready for a lengthy discussion whose outcome could not be ascertained.
Following the cash bid, CRH will now be given access to material to carry out due diligence on PPC and an opportunity to submit an updated expression of interest during the week commencing November 20th, which will include a value per share for the company.
CRH is the world’s third-largest building materials supplier by market capitalisation behind LafargeHolcim and France’s Saint Gobain.
But the firm’s decision to compete with industry giants like LafargeHolcim and Fairfax Financial underscores the importance of PPC as a market leader in South Africa. If successful, the acquisition will help CRH to not only enter the South African market but also reach most of the sub Saharan African market.
CRH is also set to acquire US based Ash Grove Cement Co. at $3.5 billion.
Africa’s Booming construction industry has attracted cement makers from all walks of live keen to jostle for the lucrative market.
The cement making business has seen stiff competition with local firms forced to lower their prices leading to some of them posting losses.