Speculation is mounting that CRH, the Irish-based building supplies company, will bid for Tarmac, put up for sale by Anglo-American earlier this month. Especially after CRH posted strong interims this week and announced this morning that they have acquired the remaining 55% of Dutch company Cementbouw.
The company’s total investment in the company now stands at €184m. However, there is still money to spare for further acquisitions. This week, the company recorded a 27% rise in pre-tax profits for the six months to June 30 at €670m and a jump in revenue of 21% at €9.7bn. A strong European performance offset a decline in the US market.
Commenting on the results, chief executive Liam O’Mahony confirmed the company would continue to look at ways to expand. “CRH’s geographic, sectoral and product balance continues to deliver in 2007 both in terms of overall trading performance and development activity.
“With an ongoing focus on price and cost effectiveness driving organic performance, benefits from the record 2006 acquisition spend and a sustained development emphasis we expect strong year growth.”
As well as a bullish set of results, CRH already have a strong record when it comes to acquisition. They spent their highest ever amount in 2006 and a further €1bn in the first half of 2007. However, with a price tag of around £3bn, Tarmac would be the company’s biggest-ever purchase.
Speaking to the Independent this morning, CRH chief financial officer Myles Lee said, “most of the major participants will be looking at the target opportunity and we will do likewise.”
Other potential bidders include Lafarge and Holcim. Cemex and Aggregate Industries may also be in the frame, although both companies could face problems over competition.