Switzerland’s Holcim has announced plans to spin off its North American operations in a New York initial public offering (IPO) that could value the business at around $30 billion. This move represents a significant change for the building materials giant and comes alongside the appointment of a new chief executive.
Miljan Gutovic, currently the head of Europe at Holcim, will take over as CEO starting May 1, succeeding Jan Jenisch. Holcim is one of the world’s largest cement manufacturers.
The divestment of its North American operations is the most significant shake-up at Holcim since its acquisition of French competitor Lafarge in 2015. The company expects to complete the spin-off in the first half of 2025, with Holcim retaining no stake in the new entity.
Jan Jenisch stated, “We’re going to do a full capital market separation of our North American business, so we will list 100% of the business on the New York Stock Exchange,” expressing confidence in gaining shareholder support for the flotation.
The U.S. business aims to increase annual sales from its current $11 billion to over $20 billion and generate an operating profit exceeding $5 billion by 2030, focusing on capitalizing on the region’s infrastructure and construction boom.
Holcim’s remaining global operations in Europe, Latin America, Africa, and Asia will continue to be listed on the Swiss blue-chip SMI index, emphasizing building solutions such as roofing products.
Jan Jenisch, who has led Holcim since 2017, will remain as chairman and will spearhead the planned listing in the U.S., where building materials companies tend to trade at higher earnings multiples compared to Europe, potentially enhancing the new company’s valuation.
Holcim is the largest cement manufacturer in North America, employing 16,000 people across 850 sites. The U.S. business competes with companies like Carlisle and RPM in building products and solutions, as well as Eagle Materials and Summit Materials in the cement industry.
In the first nine months of 2023, the U.S. operations accounted for a fifth of Holcim’s sales and were the most profitable region, with sales consistently growing by over 20% in recent years. The remaining Holcim business will have sales of approximately 17 billion Swiss francs and employ 48,000 people.
Jan Jenisch noted that the U.S. operations had become “simply too successful to be run as a subsidiary.”
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