Building materials group CRH has entered into a €6.5 billion transaction that will see it take ownership of a large tranche of assets from European rivals Lafarge and Holcim.
The deal is believed to be one of the largest ever acquisitions by an Irish company and the company's shares moved higher in Dublin trade today.
Lafarge and Holcim were instructed to offload some of their businesses to win regulatory approval for a €35 billion merger.
CRH has said it is planning an equity placing equivalent to almost 10% of its shares to help fund the acquisition along with cash and new debt.
CRH is the leading producer of asphalt for road building in the US.
It said the deal would expand its global reach, making it the largest building supplier in central and eastern Europe and the third biggest in the world.
CRH will fund the purchase, which will double its exposure to emerging markets, with €2 billion euros of cash, new debt and a 9.99% equity placing, it said in a statement.
"We are acquiring a quality portfolio of assets, which complement our existing positions, at an attractive valuation and at the right point of the economic cycle," CRH's chief executive Albert Manifold said.
Lafarge and Holcim announced merger plans last year, hoping to cut costs and tackle overcapacity and weak demand. Their new company will be the world's biggest cement maker with $44 billion in annual sales.
The merging firms said the sale ensured their tie-up was on track to complete in the first half of this year, with the vast majority of assets they needed to sell now placed with buyers.
CRH said it was buying assets mainly in Europe, Canada, Brazil and the Philippines and the deal, if completed by mid-2015, would add around 25% to underlying earnings in the first full year of ownership.
Some 90 million euros of synergies - net of implementation costs - would also be achieved in the first three years post-acquisition, it added.
CRH, with annual revenues of €18 billion in 2014, beat a consortium led by Blackstone, which people close to the matter told Reuters was also in the running.
CRH was in a stronger position than the buyout firms because it could integrate the assets into its own business, and so offer a higher price, one of the people said.
Holcim and Lafarge initially received more than 60 tentative bids from industry and private equity firms for some or all of the assets.
In a conference call with reporters, the chief executives of the merging firms said the CRH deal price included the assumption by the Irish firm of about €1.3 billion of debt.
CRH, which had a net debt of around €2.5 billion or 1.5 times earnings at the end of 2014, is also embarking on a disposal plan of its own.
