8-K

CRH PUBLIC LTD CO 8-K Report (Oct 17, 2006)

Filed October 17, 2006For Securities:CRH

Summary

CRH plc, a prominent international building materials group, announced on October 17, 2006, a significant strategic move into the Chinese market with the signing of a Letter of Intent to acquire an equity stake in the cement operations of the Jilin Yatai Group, known as Yatai Cement. This potential acquisition involves an initial 26% equity stake, with an option to increase ownership up to 49% within three years. Yatai Cement is a substantial entity, ranking among China's top ten cement producers with a total capacity of approximately 9 million tonnes per annum spread across four integrated plants and one grinding station in northeastern China. This development is part of CRH's broader strategy to establish a strong presence in attractive Chinese markets. It follows closely on the heels of a previously announced agreement to acquire Harbin Sanling Cement Company in the same region. The company's Chief Executive, Liam O'Mahony, expressed optimism about the long-term growth prospects in northeast China, underscoring the strategic importance of these acquisitions for CRH's future expansion. The transaction remains subject to detailed negotiation, due diligence, and necessary Chinese government approvals.

Key Highlights

  • 1CRH has signed a Letter of Intent to acquire an equity stake in Yatai Cement, a major Chinese cement producer.
  • 2The deal involves an initial 26% stake with an option to increase ownership to up to 49% after three years.
  • 3Yatai Cement operates 4 integrated cement plants and 1 grinding station with a total capacity of approximately 9 million tonnes per annum.
  • 4The acquisition targets the Jilin and Heilongjiang provinces in northeast China, identified as attractive markets with good long-term growth prospects.
  • 5This move complements CRH's recently announced acquisition of Harbin Sanling Cement Company in the same region.
  • 6The transaction is subject to further negotiation, due diligence, and Chinese government approval.

Frequently Asked Questions

CRH plc is announcing its intention to acquire a significant equity stake in Yatai Cement, a major cement producer in China, as part of its strategic expansion into the Chinese building materials market.

CRH plans to initially purchase a 26% equity stake in Yatai Cement, with an option to acquire additional shares up to a maximum of 49% after three years. The acquisition is contingent on due diligence, final negotiations, and Chinese government approval.

This proposed acquisition, along with the recent agreement to acquire Harbin Sanling Cement Company, aims to establish a strong operational and market position for CRH in the strategically important and high-growth regions of northeast China.

Yatai Cement is one of the top ten largest cement groups in China, possessing substantial capacity of approximately 9 million tonnes per annum across its facilities in Jilin and Heilongjiang provinces.