LafargeHolcim Ltd. is all set to buy Bridgestone Corp.’s Firestone Building Products unit for $3.4 billion. Following this transaction, to be done in cash and debt, LafargeHolcim will expand its business in into the roofing business in the United States.
LafargeHolcim's Chief Executive Officer Jan Jenisch, appointed in 2017, is planning to return to his former stomping ground, as he was the earlier associated with chemical and roofing-membrane maker Sika AG. For this deal to take place, Jenisch had to slash costs and sell assets in Southeast Asia.
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"After strong cost savings and portfolio restructuring over the last years, we are encouraged by this growth initiative. This might change the narrative of current management from a cost-saving story towards a consolidation story,” Bloomberg quoted Bergos analyst Martina Oetiker as saying.
As per details, the deal is expected to close in the first half of the year, and will contribute to earnings-per-share from the first year itself. Analysts believe that though US acquisition reduces the company’s exposure to emerging markets, it will expand the solutions and products unit created in 2018.
Earlier, analysts had predicted that the Swiss firm had resources to but the Bridgestone unit, while cautioning about the limited benefits as the new business seems unfit with its core cement and aggregates operations.
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