Holcim, the Swiss cement giant, has unveiled plans to spin off its North American business and list it in the US, aiming to unlock value and accelerate growth for the unit.
The Zug-based company also announced that Miljan Gutovic, head of its European business, will take over as group CEO in May. Outgoing chief Jan Jenisch will continue as chair and oversee the planned separation.
“We’re too successful in North America, too big to manage it as a subsidiary,” Jenisch told the Financial Times. “We have all the tools, and supply chain in place. But we needed more focused management.”
Formed nearly a decade ago from the merger of France’s Lafarge and Switzerland’s Holcim, the company faced challenges stemming from competing egos among senior leadership and a scandal involving payments to terrorist organizations in Syria.
Under the outlined plan, Holcim will conduct a “full capital market separation” of its North American business, with the final structure of the spin-off to be determined later this year and the US listing expected to be completed in the first half of 2025 pending shareholder approval.
European firms have increasingly turned to US listings for higher valuations and increased market liquidity and analyst coverage. CRH, the world’s largest building materials group, shifted its primary listing from London to New York last year, with shares rising nearly 50 percent since then.
Though Holcim’s market capitalization stands at around $43.1 billion, Jenisch estimates the North American business could be valued at around $30 billion, despite accounting for only about 40 percent of sales last year.
The North American business, estimated to have generated around $11 billion in net sales in 2023, aims to surpass $20 billion by the end of the decade, capitalizing on construction and US infrastructure investment spurred by Biden administration policies.
With approximately 850 sites and 16,000 employees across the US and Canada, Holcim has expanded its North American presence through acquisitions, including the purchase of Firestone Building Products from Japan’s Bridgestone Corporation for $3.4 billion in 2021.
The company eyes a pipeline of acquisition projects in the US, with US-listed shares facilitating further deal-making efforts, according to Jenisch.
“Decarbonization and M&A” will drive growth at the Swiss-based business post-spin-off, with Holcim emphasizing its commitment to greener construction and decarbonization efforts.
Holcim will maintain its listing in Switzerland post-spin-off, maintaining operations across Europe, Asia, the Middle East, Africa, and Latin America.