Saint-Gobain offers to buy rival CSR in US$2.8bil deal

The transaction would rank as the biggest takeover by a French company in 2024 and the second-largest transaction in Australia so far this year. — Bloomberg

LONDON: Cie de Saint-Gobain of France has offered to buy Australia’s CSR Ltd for A$4.3bil (US$2.8bil) as the building industry consolidates amid a shift to more climate-friendly materials.

The offer price of A$9 a share represents a 34% premium to CSR’s Tuesday closing price.

The transaction would rank as the biggest takeover by a French company in 2024 and the second-largest transaction in Australia so far this year, according to data compiled by Bloomberg.

Saint-Gobain’s announcement confirmed a Bloomberg News report earlier Wednesday that the companies were in talks. In a separate statement, CSR confirmed the offer and said its board had unanimously decided to pursue a transaction.

Chief executive officer Benoit Bazin has been reshaping Saint-Gobain’s portfolio and leading a push to expand in key regions such as North America, part of efforts to focus on more environmentally-friendly materials.

Saint-Gobain, founded during the reign of King Louis XIV and known for having made the mirrors of the Palace of Versailles, is one of the world’s biggest construction suppliers. It manufactures materials such as plasterboard used for partitions, soundproofing materials and glass for skyscrapers.

The French company has already lined up financing for the deal, people with knowledge of the matter said. The company had about 6.1bil euros (US$6.6bil) of cash and equivalents at the end of December, according to data compiled by Bloomberg.

An acquisition of CSR could help Saint-Gobain diversify and boost growth in residential and commercial building products in Australia and New Zealand.

“The strategic fit in terms of product exposure would make a great deal of sense, while the acquisition would be ‘bite-size’ given Saint-Gobain’s strong balance sheet,” Stifel analyst Tobias Woerner said in a note.

“It would be a nice geographic expansion combined with its Asian exposure. It would also increase its focus around its ‘new’ strategy of light, sustainable construction.” — Bloomberg