Swiss cement company Holcim to buy Germany's Xella

ZURICH

Swiss cement company Holcim said on Monday it is to buy German building and insulation firm Xella for 1.85 billion euros ($2.2 billion).

Holcim said it has signed a binding takeover agreement with Xella, and figured on 60 million euros' worth of synergies three years after completing the acquisition.

Holcim, among the top cement producers in the world, has been diversifying into roofing and cladding products through acquisitions.

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 euros in 2025.

Holcim CEO Miljan Gutovic called the transaction a "strategic acquisition" which would expand "cross-selling and systems-selling opportunities" to customers.

"Xella will add to our customer offering in the highly attractive EUR 12 billion+ walling market, with cross-selling and systems-selling opportunities, he said in a statement.

Holcim said it was paying a multiple of 8.9 times Xella's projected 2026 earnings before interest, tax, depreciation appreciation (EBITDA), and said it expected the acquisition to be earnings accretive in year one.

Holcim had net sales of $20 billion (17.5 billion) last year, and employs more than 48,000 people across Europe, Latin America, Asia, the Middle East and Africa.