© Reuters. Holcim shares rise after announcing plans to spin off its North American unit
(Updated: January 29, 2024, 1:53 pm EST)
Swiss company HLN announced over the weekend that it plans to spin off its North American business and list it in the US in the first half of 2025.
The move could reportedly create a new company worth around $30 billion. Holcim (SIX:) shares were one of the best performers in Europe on Monday.
Reacting to the news, Citi analysts, who have a Buy rating and a CHF 75 price target on the stock, explained that the plan to spin off the North American business is driven by the two's different strategic approach. businesses in the future and the intention to provide both with adequate and appropriate capital structures.
“The NAM business is positioned to capitalize on strong construction spending in the region supported by elevated infrastructure investments, while the ex-NAM business continues to strategically focus on decarbonization-driven growth,” the analysts wrote.
“The spin-off is expected to be structurally straightforward given the current regionalized setup, and the new all-US construction solutions company anticipates inclusion (management confirmed that all criteria for inclusion must be met),” the Citi analysts added. . .
The ex-NAm business is expected to remain in the Swiss market index.
