Five weeks after it began trading on the New York Stock Exchange, Summit Materials has moved to strengthen its largest holding, Continental Cement Co., by entering a deal with Lafarge North America.
In exchange for $450 million in cash and Continental’s Bettendorf, Iowa, terminal, Summit will gain Lafarge North America’s cement plant in neighboring Davenport, Iowa, with 1.2 million tpy capacity, plus seven Mississippi River terminals from Minneapolis to New Orleans. Summit plans to integrate the Iowa and Mississippi River properties with Continental, whose capacity and distribution footprint would climb to 2.45 million tpy and eight terminals.
“The [mill and terminals] are an excellent fit with our materials-based growth strategy and a continuation of Summit’s proven track record of value-added acquisitions,” said Summit Materials CEO Tom Hill. “The combination of the Davenport assets and Continental Cement creates a strategically compelling and complementary multi-plant cement business in very attractive markets along the Mississippi.”
Summit and Lafarge project a July closing, hinging on a) Lafarge and Holcim consummating their $40 billion-plus merger that month; and b) U.S. Federal Trade Commission concurrence with a Lafarge North America and Holcim (US) Inc. asset disposal plan.
