CRH shares rally on talk of Philippines unit sale

The transaction could net materials giant $3bn

CRH shares rallied on Wednesday on speculation the building materials giant may sell its Philippines cement unit for as much as $3 billion (€2.73 billion).

The company, led by chief executive Albert Manifold, has hired investment bankers at JP Moran to find a buyer for the business, which could fetch between $2 billion and $3 billion, Bloomberg reported.

A spokesman for CRH decline to comment with contacted by The Irish Times.

Shares in CRH rose as much as 1.1 per cent to €33.75 on the back of the report, its highest level since May 2017.


CRH inherited the Philippines business in 2015 through its €6.5 billion of assets from European peers Lafarge and Holcim as part their own merger. It had been loss-making for much of its time under CRH, dogged by weak infrastructure spending, rising local competition, and a flood of cheap imports.

However, the group reported 12 months’ ago that it the business was stabilising.

CRH reported in August that demand for cement in the Philippines “grew modestly” in the first half “due to resilient growth in both residential and non-residential markets”. Still, it noted that there had been a slowdown in infrastructure spending due to delays in government budget approvals and a general election in May.


There has been speculation in the market since it emerged in early February that Stockholm-based activist fund Cevian had build up an almost 3 per cent stake in CRH that the Swedish firm may press management to offload the Philippines business.

Cevian's managing director Christer Gardell said in June that CRH "has become too complex, both structurally and operationally, which hampers performance and traps value".

A sale of the Philippines unit would mark an about-turn for Mr Manifold, who has defended the holding on a number of occasions in recent times.

“It’s a cyclical industry,” the chief executive said in an Irish Times interview last year. “The fundamentals of that country are very good, and it has significant construction needs going forward.”

Since Mr Manifold took charge in 2014, CRH has spent almost €14 billion on acquisitions – including its $3.5 billion takeover last year of Kansas-based Ash Grove, the fifth-largest US cement company.

However, the chief executive has also been ruthless in selling off underperforming or unwanted assets, which has raised more than €7.5 billion over the same period. That includes €1.64 billion from the group’s agreement in July to sell its European distribution arm to funds managed by US private equity group Blackstone.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times