8-K

CRH PUBLIC LTD CO 8-K Report (Jan 30, 2008)

Filed January 30, 2008For Securities:CRH

Summary

CRH Public Limited Company (CRH) has announced a significant strategic acquisition in China. On January 30, 2008, the company disclosed the signing of an agreement to acquire a 26% shareholding in Yatai Cement, a major cement producer in northeastern China. This investment, totaling RMB 2.1 billion (approximately euro 0.2 billion), will also support Yatai Cement's ongoing initiative to double its production capacity, with an option for CRH to further increase its stake to 49% in the future. The acquisition aligns with CRH's stated strategy to expand its presence in key growth markets and strengthens its position in the rapidly developing Chinese building materials sector. Yatai Cement operates multiple integrated cement plants and grinding stations, and its expansion project, scheduled for completion in 2009, will solidify its leading market share in its region and establish it as a top-tier cement supplier in China. CRH anticipates active participation in the management and operations of Yatai Cement.

Key Highlights

  • 1CRH signs agreement to acquire a 26% shareholding in Yatai Cement, China.
  • 2Total CRH investment amounts to RMB 2.1 billion (euro 0.2 billion).
  • 3The investment includes financing for Yatai Cement's capacity expansion to double production.
  • 4CRH holds an option to increase its stake to 49% after four years.
  • 5Yatai Cement is a significant player in northeastern China with current capacity of 9 million tonnes per annum, set to reach 18 million tonnes by 2009.
  • 6CRH expects active participation in the financial, operational, and Board-level management of Yatai Cement.
  • 7The transaction is subject to Chinese regulatory approval.

Frequently Asked Questions

This acquisition is strategically important as it significantly increases and strengthens CRH's cement presence in northeastern China, a key growth market. It aligns with CRH's objective to expand in developing economies and capitalizes on the long-term growth potential and consolidation within the Chinese cement industry.

CRH has acquired an initial 26% shareholding in Yatai Cement. The agreement also includes an option for CRH to acquire an additional 23% stake after four years, potentially increasing its total ownership to 49%, based on an agreed-upon formula.

Yatai Cement currently has a cement capacity of 9 million tonnes per annum across its four integrated cement plants and two grinding stations. A major investment program is underway to double this capacity to 18 million tonnes per annum, with completion scheduled for 2009.

Yes, CRH will have representation at financial, operational, and Board levels and will actively participate in the management of Yatai Cement. This indicates a hands-on approach to the investment.