Displaying items by tag: Acquisition
John King Group acquires DAB Valves
18 May 2023UK: John King Group has acquired valve manufacturer DAB Valves for an undisclosed amount. DAB Valves sells a variety of valves and associated equipment within their range from slide and butterfly valves to gravity flap diverter valves and drop out boxes. The 40-year old company is based near Parwich in Derbyshire.
David Wadworth the managing director of John King Group, said “In acquiring DAB Valves we have added a complementary range of products to the existing John King Group portfolio. We are delighted to announce that DAB Valves
will continue to be manufactured in our Yorkshire based factory where we have a full complement of machinery to be effective in this objective. We are delighted to harness our production capabilities with the on-going support of Bob Wright and the DAB Valves design team who have over 40 years of industrial and applicational expertise.”
Bob Wright, the managing director and owner of DAB Valves, added, “Selling the business to John King Group is an exciting one. Yes, it frees up some of my time and enables me to focus on what I love the most, which is the design and engineering of the Valves. Having John King Group ambitious team behind DAB Valves, I know will take the brand to the next level. You only have to visit their Leeds manufacturing site to feel the energy and hunger for success, along with their continued reinvestment in equipment and people.”
John King Group says that its purchase of the DAB Valves brand will further strengthen its global support network and in-house design, engineering and manufacturing capabilities.
NCL Industries to acquire Vishwamber Cements
15 May 2023India: NCL Industries has concluded a share purchase agreement with the owners of Vishwamber Cements. Under the deal, NCL Industries will acquire 100% ownership of Vishwamber Cements. The group says that it plans to merge the newly acquired subsidiary into its own cement business. It noted that Vishwamber Cements owns 130 hectares of active limestone quarries.
Update on California, May 2023
10 May 2023Eagle Materials announced this week that it had completed the acquisition of Martin Marietta’s cement import business in the north of California. A key part of the deal includes the sale of a cement terminal at Stockton. No value for the transaction has been disclosed.
The agreement prompts discussion for two immediate reasons. Firstly, it continues the enlargement of Eagle Materials’ cement business with its second terminal in California. The company operates its cement business in a band running almost right across the US. It runs seven cement plants in seven different states and jointly operates, with Heidelberg Materials, a plant in Texas too. It also runs a network of 25 cement terminals, including the new acquisition, stretching from California in the west to Pennsylvania in the east.
Eagle Materials’ focus on the cement sector also harks back to its previous plans to separate its various businesses. In 2019 it approved a plan to split its heavy materials and light materials businesses into two publicly-traded entities. The decision was made in response to pressure by shareholder Sachem Head Capital Management to make the company, in its view, more valuable. A strategic portfolio review followed but the planned separation was subsequently delayed due to the Covid-19 pandemic and poor market conditions, amongst other reasons. The board of the company then cancelled the proposed separation in 2021 citing the financial benefits of a diversified business, opportunities for strategic growth and the divestment of its oil and gas proppants business.
The other talking point is that the Eagle Materials transaction follows a positive response by the Federal Trade Commission (FTC) in response to the abandonment of CalPortland’s attempt to buy the Tehachapi cement plant in southern California and two related terminals from Martin Marietta. CalPortland’s parent company Taiheiyo Cement said in late April 2023 that it had terminated the acquisition agreement originally announced in mid-2022 due to its inability to obtain approval from the FTC in a timely manner. Whilst the FTC did not say if it had directly tried to block the proposed deal it did say, “The abandonment is a victory for consumers and preserves competition for a key component of Southern California’s construction and infrastructure industries.”
The FTC argued that the transaction would have reduced the number of cement suppliers in Southern California from five to four, further concentrating an already concentrated market, and was “presumptively illegal.” It noted that the Tehachapi plant was only about 20km away from CalPortland’s Mojave cement plant. It went on to say that, if the deal had gone ahead, CalPortland was poised to own half of the cement plants serving the Southern California market. It added that it would have been well-placed to raise its prices and that, “the transaction would have also increased the likelihood for coordinated action between the remaining competitors in this concentrated market.”
The de-facto block by the FTC of the Tehachapi sale now opens up the question of who Martin Marietta might try to sell it to next. Cemex, Mitsubishi Cement and National Cement (Vicat) are the obvious contenders given that they each also run integrated plants in the state. Of course another company, especially one with some form of existing distribution network, may express interest. Given its enlarged presence in Northern California, Eagle Materials springs to mind. Other potential buyers are, of course, available.
Tanzanian government explains approval of acquisition of Tanga Cement by Heidelberg Materials
10 May 2023Tanzania: The government has defended its support for the acquisition of a majority stake in Tanga Cement by a subsidiary of Heidelberg Materials. In 2021 Scancem International, a subsidiary of Heidelberg Materials, agreed to buy a 68% share of Tanga Cement from AfriSam for around US$59m. The Fair Competition Commission (FCC) provisionally approved the deal but the Fair Competition Tribunal (FCT) blocked it in late 2022 following lobbying by Chalinze Cement and the Tanzania Consumer Advocacy Society on the grounds that it would potentially reduce market competition, according to the Citizen newspaper. However, Scancem International applied again to the FCC in December 2022 to push through the agreement. This motion was then approved in February 2023.
During a parliamentary debate on the issue in early May 2023 Ashatu Kijaji, the Minister for Industry and Trade, defended the decision to re-approve the deal on the grounds that the approved merger application was different from the one rejected by the FCT. However, other members of parliament were sceptical about the decision.
US: CalPortland and Martin Marietta Materials have cancelled a deal under which CalPortland was set to acquire the Tehachapi cement plant and other assets worth US$350m in Southern California. The US government's Federal Trade Commission (FTC) described the cancelled deal as 'presumptively illegal.'
FTC Bureau of Competition director Holly Vedova said “Following an in-depth investigation by FTC staff of the Mergers Division and Bureau of Economics, along with the California Attorney General’s Office, CalPortland and Martin Marietta have announced that they have abandoned their planned transaction. The transaction would have reduced the number of cement suppliers in Southern California from five to four, further concentrating an already concentrated market." Vedova concluded "The abandonment is a victory for consumers and preserves competition for a key component of Southern California’s construction and infrastructure industries."
Holcim invests in Coomtech
05 May 2023UK: Switzerland-based Holcim has invested in Coomtech, a developer of low-emission kinetic drying technology for raw materials. The group says that Coomtech's technology emits up to 75% less CO2 than traditional drying methods and enables increased use of recycled materials in cement and concrete. Holcim subsidiary Aggregate Industries previously collaborated with Coomtech on fly ash drying at a UK power plant.
Edelio Bermejo, head of global research and development said "At Holcim, we are continuously working to implement greener operations for a net-zero future, and to increase the use of recycled materials in our products to drive circular construction. Coomtech's low-emission drying technology helps us meet both these goals. I look forward to working with them as a key partner in our journey to decarbonise buildings."
US: Eagle Materials has completed its acquisition of Martin Marietta's cement import and distribution business in Northern California. The business is centred on the Stockton cement terminal in San Joaquin County. Eagle Materials hopes that the new business will enable it to extend and strengthen its reach across its heartland US cement sales network.
President and chief executive officer Michael Haack said "Our Nevada Cement operations have long-standing customer relationships in Northern California, and this acquisition will uniquely position us to better serve these and new customers with complementary imported product. Our entire cement system is currently 'sold out,' and this acquisition will enable us to more actively participate in the strong US demand environment."
Holcim to acquire PASA
04 May 2023Mexico: Switzerland-based building materials group Holcim concluded a deal to acquire the Mexican roofing producer PASA on 3 May 2023. PASA employs 250 people, and generated sales of US$38m throughout 2022.
Holcim said that the deal will help to expand its products and solutions business, an area in which it has now made five acquisitions to date in 2023. Chief executive officer Jan Jenisch expects the group to acquire 30 companies throughout 2023, of which it already acquired 12 during the first quarter of the year.
India: Adani Group has reportedly prepaid US$200m-worth of a US$1bn mezzanine loan for its acquisition of Holcim's Indian business in mid-2022. The loan will be due for repayment in September 2024. Bloomberg has reported that the conglomerate hopes that the part prepayment will help it to secure a three-year extension to repayment.
CalPortland abandons attempt to buy Tehachapi cement plant from Martin Marietta Materials
28 April 2023US: Taiheiyo Cement says that its subsidiary CalPortland has terminated its deal to buy the Tehachapi cement plant from Martin Marietta Materials. It has blamed the situation on the two parties being unable to “timely obtain the necessary approval by the US Federal Trade Commission.” The deal was originally announced in August 2022 with CalPortland agreeing to buy the integrated plant in California and two terminals.