Saint Gobain offers $2.8 billion to acquire Australian CSR
The deal opens up the residential and commercial construction market in Australia and New Zealand to the Paris-based company
2' min read
2' min read
French building materials manufacturer Cie. de Saint-Gobain has offered USD 2.8 billion (equivalent to AUD 4.3 billion) to acquire Australian rival CSR Ltd. This was revealed by Bloomberg, after a morning in which rumours of early talks and advisory teams to reach an agreement were rife.The offer price of AUD 9 per share represents a 34% premium over CSR's Tuesday closing price.
This morning's rumours had already sent the Australian company's shares soaring to their highest level in almost 32 years. CSR shares, in fact, rose 18% in Sydney to AUD 8.02, the highest level since June 2008. So much so that trading had been halted pending an announcement. The company's market value rose to AUD 3.8 billion (USD 2.5 billion).
CEO Benoit Bazin reshaped Saint-Gobain's portfolio and led a push for the company's expansion into key regions such as North America. Saint-Gobain - founded during the reign of King Louis XIV and known for making the mirrors in the Palace of Versailles - is one of the world's largest construction suppliers. It produces materials such as plasterboard used for partition walls, soundproofing materials and glass for high-rise buildings. In recent years, Saint-Gobain has acquired companies including Canadian coatings manufacturer Kaycan Ltd. and US specialty building chemicals manufacturer GCP Applied Technologies Inc. while divesting glass bottle manufacturer Verallia SA.
The acquisition of CSR could help the Paris-based multinational diversify and stimulate growth in residential and commercial building products in Australia and New Zealand. St. Gobain's shares have risen 29 per cent in the past year, bringing the French company's market value to almost €35 billion.As St. Gobain itself explains, the company employs 168,000 people and operates in 75 different countries. In addition to building materials, the company produces windows and components for the automotive and transport sectors in general, as well as products used in other sectors such as healthcare. The Australian CSR, on the other hand, was founded in 1855 and its brands include Gyprock plasterboard and Bradford Insulation. It has 2,600 employees in Australia and New Zealand.
