The gypsum business is not part of the core strategy
LAFARGE, Europe’s most indebted cement maker, is drawing interest from buyout firms for its gypsum business.
Companies including TPG Capital, Carlyle Group and PAI Partners are preparing for a sale this year and may consider bids for all or part of the operations, said people familiar with the talks, who requested anonymity as Lafarge has not yet made a decision. The US unit is still unprofitable, so Lafarge may wait for a recovery before a sale is made.
The unit may fetch at least €450m or even top €1bn, provided profit recovers, analysts said. CEO Bruno Lafont has pledged to step up disposals to cut debt. The cement maker aims to retain investment-grade credit ratings after borrowing to make a $15bn acquisition in North Africa in 2008, just before a construction slump in Europe and the US.
"The gypsum business is less and less at the core of the group’s strategy, which wants to focus on cement and emerging markets," Rafic El Haddad, an analyst at Natixis in Paris, said. "It looks like a business for private equity firms. Industrial players can’t buy it for antitrust reasons."
Lafarge declined to comment on the possible sale.
Lafarge gained 62c, or 1,3%, to €47,92 in Paris trading yesterday. The stock has gained 20% in the past six months.
Mr Lafont told shareholders in May the "strategic priority of the company is cement in emerging markets, and innovation, notably in concrete. We’re not closed … there will be divestments."
The North American gypsum operations posted a €33m loss in the first nine months of last year. Bloomberg
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