CRH to buy French firm for close to €100m

Building materials group, CRH, is set to buy a business in France for a sum estimated at close to €100 million.

French building products group, Saint Gobain, announced yesterday that it has agreed to sell a subsidiary, Saint Gobain Stradal, to CRH.

Neither side disclosed a price for the purchase, and CRH made no statement on the deal.

The group generally covers acquisitions like this in its strategic development reports. It is due to make one in July, but the Stradal purchase may not be completed by then, as it is subject to French competition authority approval.

However, Merrion Stockbrokers' analyst, John Mattimoe, valued the deal at just under €100 million, on the basis that CRH would class it as a "sizeable bolt-on".

Stradal has yearly sales of €180 million and 1,000 employees. It makes concrete products and fittings used in road building and other construction work.

Mr Mattimoe described the deal as a logical fit with CRH's existing French and Belgian concrete operations, which produce similar and complementary products. He does not believe CRH's share of the French market for these products is big enough to prompt the country's competition watchdog to stop the deal.

CRH spent just over €1 billion on acquisitions last year, but the rate at which it has been buying businesses this year is slower.

Before news of the deal yesterday, the company had closed deals worth €100 million since the beginning of the year, around 25 per cent of what it had done during the same period in 2004.

However, at its annual general meeting, its chief executive, Mr Liam O'Mahony, said he was not concerned at the slower pace of acquisition, and explained that deals were taking longer to close.

"Sometimes you go through a period of rapid deal-making and sometimes they are slower to close," he said.

There was no indication from the group yesterday that the rate at which it has been completing acquisitions has since accelerated or slowed down.

Mr Mattimoe said that news of the Stradal purchase was welcome in light of the company's slower than average purchase rate.

CRH had sales of close to €13 billion last year, making it the biggest company operating in the State.