Holcim's Acquisitions in 2005

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Case Details:

Case Code : BSTR168
Case Length : 12 Pages
Period : 1999-05
Organization : MG Rover
Pub Date : 2005
Teaching Note : Available
Countries : Global
Industry : Mobile Phone

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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Excerpts

Acquiring AI

About AI

In 2003, AI produced 66.4 million tonnes of aggregates, 11.8 million tonnes of asphalt, 7.0 million cubic metres of ready-mix concrete and 3.7 million tonnes of pre-cast concrete products. With operations in UK, US, Norway and Channel Islands, the company employed over 8,600 people working in more than 650 locations by the end of 2003. Half of the company's revenues came from the US.

In 2003, AI's revenues increased to £1,459 million from £1,378.2 million in 2002. The company reported a seventh successive year of profit with profit before tax increasing to £140.1 million in 2003 from £134.5 million in 2002...

Acquiring ACC

Background of the Deal

The cement industry in India was so highly fragmented that even in 2004, the 146.38 MT of installed capacity under large plants category was controlled by as many as 55 companies. With an installed capacity of approximately 150 MT in 2005, the Indian cement industry in 2004-05 was the second largest cement producer in the world accounting for approximately 6% of the global production...

Outlook

Not only did the deals with AI and ACC result in Holcim's entry into the two attractive markets of UK and India, but it also brought in immediate revenues to Holcim. The two acquisitions helped Holcim to achieve increased capacity and sales in all the product and geographic segments (Refer Exhibit XI)...

Exhibits

Exhibit I: Performance Parameters of Holcim between 2001 and 2004
Exhibit II: Balancing the Portfolio
Exhibit III: The Indian Attractiveness
Exhibit IV: Revenue Generation from the Various Operating Segments at Holcim
Exhibit V: Revenue Generation Region-Wise at Holcim
Exhibit VI: Shareholding Structure among ACIL, ACC, ACEL, GACL, FIs, FIIs etc.
Exhibit VII: Performance Parameters of ACC between 2001-02 and 2003-04
Exhibit VIII: Shareholding Structure among ACC, ACIL, GACL and Holcim after the Deal

Exhibit IX: Deal Valuations in the Cement Market of India
Exhibit X: Region-Wise Production of Cement at Holcim in 2004
Exhibit XI: How the Acquisitions Stacked Up


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