Holcim said today it will buy German walling systems maker Xella for €1.85 billion, a move aimed at tapping the growing European building refurbishment market.
The European renovation market is worth around €250 billion a year, according to European Union estimates, with renovation rates set to double in coming years to improve the energy efficiency of older buildings.
Xella, which makes blocks used to improve heat and sound insulation under the brands Ytong, Silka, Hebel and Multipor, has projected sales of around €1 billion in 2025.
Holcim CEO Miljan Gutovic said the acquisition, the Swiss company's largest in four-and-a-half years, was part of its increased focus on sustainable construction.
"Xella will add to our customer offering in the highly attractive €12 billion plus walling market, with cross-selling and systems-selling opportunities," Gutovic said in a statement.
The European walling market is estimated to grow to €16 billion by 2030 to meet energy efficiency regulations and demand for 10 million new homes, Holcim said.
The transaction also reflects Holcim's tilt toward its building products business which offers higher growth and profitability than its traditional cement and aggregates business, driven by demand for roofing, insulation and prefabricated systems.
These products are lower-carbon and less capital-intensive than cement, while renovations are less vulnerable to economic ups and downs than new build work.
Under its strategy announced earlier this year, Holcim aims to generate 50% of revenue from its products and solutions business by 2030, up from 36.6% in the first half of 2025.
Holcim said it was paying a multiple of 8.9 times Xella's projected 2026 earnings before interest, tax, depreciation and amortisation (EBITDA), and said it expected the acquisition to be earnings accretive in year one.
The Swiss company said it expected the purchase, from US private equity fund Lone Star, to be completed in the second half of 2026.
Based in Duisburg, Germany, Xella has more than 4,000 employees, and is present in 21 of Europe's most attractive markets, Holcim said.
Xella, which uses brands like Ytong, Silka, Hebel and Multipor for its products, has projected sales of around €1 billion in 2025.
