© Reuters. FILE PHOTO: The logo of Swiss cement manufacturer Holcim at its headquarters in Zug, Switzerland, October 26, 2022. REUTERS/Arnd Wiegmann/File Photo
By John Revill
ZURICH (Reuters) – Switzerland Holcim (SIX:) will spin off 100% of its North American operations in a New York IPO that could value the business at $30 billion, the building materials giant said on Sunday, while also naming a new Executive Director.
Miljan Gutovic, Holcim's current European director, will replace Jan Jenisch as CEO from May 1, said the company, one of the world's largest cement producers.
In the biggest restructuring at Holcim since the Swiss company acquired French rival Lafarge in 2015, the divestment will likely be completed in the first half of 2025.
The spinoff could value the new company at about $30 billion, Jenisch told reporters, with Holcim not retaining any stake.
“We are going to make a total separation of the capital markets from our North American business, so we will list 100% of the business on the New York Stock Exchange,” said Jenisch, who was confident of obtaining shareholder support for the IPO. .
The US company aims to increase annual sales from around $11 billion today to more than $20 billion and generate operating profits of more than $5 billion by 2030, the company said.
The rest of Holcim's global business (in Europe, Latin America, Africa and Asia) would remain listed on the Swiss stock exchange and focus on creating solutions such as roofing products.
Jenisch, who has led Holcim since 2017, will remain as chairman and lead the planned listing in the US, where building materials companies trade at higher earnings multiples than in Europe, which could improve their valuation.
Describing the United States as one of the most attractive construction markets in the world, Jenisch said the move would help the new company capitalize on the region's infrastructure and construction boom.
Holcim is the largest cement manufacturer in North America, employing 16,000 people at 850 sites. The company competes in the region with companies such as Carlisle and RPM in construction products and solutions, and Eagle Materials (NYSE and Summit Materials (NYSE in the cement industry.
The US business accounted for a fifth of Holcim's sales in the first nine months of 2023, and was also the company's most profitable region, with sales growing more than 20% on average in recent years. The rest of Holcim's business will have a turnover of around 17 billion Swiss francs and will employ 48,000 people.
The U.S. operations were “simply too successful to be managed as a subsidiary,” Jenisch said.
