Switzerland’s Holcim announced its intent to list its North American business in the U.S. with a full capital market separation. Holcim opens new tab will spin off 100% of its North America operations in a New York flotation which could value the business at $30 billion, the building materials giant said on Sunday, as it also named a new chief executive.
One of the world’s biggest cement companies, Holcim listing of North America in U.S. will create the leading pure-play building solutions company in the region. The newly-listed Holcim business will be committed to driving long-term growth in the rapidly expanding North American market and unlocking value for all its stakeholders.
Holcim’s North America businesses U.S. listing
Holcim post U.S. listing of North America is expected to remain included in the Swiss Market Index and the leader in innovative and sustainable building solutions.
Miljan Gutovic, currently head of Europe at Holcim, will replace Jan Jenisch as CEO beginning May 1, said the company, one of the world’s biggest cement makers. In the biggest shake-up at Holcim since the Swiss company took over French rival Lafarge in 2015, the divestment will likely be completed in the first half of 2025.
Holcim’s valuation
Holcim valuation over $30 billion is in “the right ballpark” for the unit, Jenisch said in a conference call after the announcement. Holcim shares soared 38% last year, reaching the highest level since 2015 in December. They closed Friday at 64.20 francs.
“We’re going to do a full capital market separation of our North American business, so we will list 100% of the business on the New York Stock Exchange,” said Jenisch, who was confident of getting shareholder backing for the flotation.
Aim’s sales boost
The Holcim U.S. business aims to boost annual sales from around $11 billion at present to more than $20 billion and generate operating profit 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 blue chip SMI index, and focus on building solutions like roofing products.
Jenisch, who has led Holcim since 2017, will remain as chairman and will lead the planned listing in the U.S., where building materials companies trade at higher earnings multiples than in Europe, potentially improving its valuation.
Capitalizing on construction boom
Describing the U.S. as one of the world’s most attractive construction markets, Jenisch said the move would help the new company capitalize on the region’s infrastructure and construction boom.
Holcim is the biggest cement maker in North America, where it employs 16,000 people across 850 sites. The business competes in the region with companies like Carlisle, and RPM in building products and solutions, and Eagle Materials and Summit Materials in the cement industry.
The U.S. business made up 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 by more than 20% on average in recent years. The remaining Holcim business will have sales of around 17 billion Swiss francs, and employ 48,000 people.
The U.S. operations were “simply too successful to be run as a subsidiary,” Jenisch said.
Holcim is expected to report earnings on February 28.
