Holcim eyes $30 bln valuation with US business listing

Holcim, the world’s largest cement maker, will spin off 100 per cent of its North American operations in a New York flotation which could value the business at $30 billion, the Switzerland-based company said on Sunday, as it also named a new chief executive.

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.

The spin-off could value the new company at around $30 billion, Jenisch told reporters, with Holcim retaining no stake.

“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.

The 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.

Boost sales

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.

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.