Points to remember
- Cementos Argos will combine its North American operations with Summit Materials in a $3.2 billion transaction.
- The deal will create one of the largest suppliers of cement and ready mixes.
- Colombia-based Cementos Argos will hold a 31% stake in the combined company and will be its largest shareholder.
Colombian company Cementos Argos has announced that it will combine its North American operations, Argos North America Corp., with Summit Materials (SUM) in a one-year cash and stock transaction. worth $3.2 billion. The merger will create one of the largest suppliers of cement and ready-mixed concrete in the United States.
Cementos Argos said it will receive approximately $1.2 billion in cash and 54.7 million shares of Summit Materials, valued at yesterday's closing price of $36 each. The company will become Summit's largest shareholder, with a 31% stake.
Cementos Argos said the merged company will have a presence in 30 states, with strong positioning in high-growth markets and full vertical integration from quarries to end customers in many of them. .
Cementos Argos CEO Juan Esteban Calle noted that the move reaffirms the company's commitment to expanding into the U.S. market, “while realizing and optimizing our intent to list the American company on the New York Stock Exchange”. Anne Noonan, CEO of Summit Materials, added that the agreement “will expand our geographic reach into high-growth markets, creating a leadership position in the cement industry nationwide.” »
companies said that together they expect to achieve targeted synergies of more than $100 million per year. The transaction is expected to close in early 2024.
Summit Materials shares fell on the news, trading down about 8% as of 3:30 p.m. ET, even if they remain solidly in the green since the start of the year.
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