Saint-Gobain has entered into a definitive agreement to acquire all the outstanding shares of CSR, through an Australian scheme of arrangement for A$9 ($5.89) per share.
This transaction corresponds to an enterprise value of A$4.5bn and a net enterprise value of A$3.2bn after accounting for monetisable property value.
The purchase price represents a 33% premium over the volume-weighted average share price for the month ending 20 February 2024.
CSR, with A$2.7bn in total revenue, is a building products company in Australia for residential and non-residential construction.
It operates 30 manufacturing plants and employs approximately 2,500 people.
The acquisition is anticipated to help Saint-Gobain establish a further presence in the Australian construction market.
Saint-Gobain CEO Benoit Bazin said: “I am very impressed with CSR’s leadership, the quality of the strategy, and the team’s excellent execution of that strategy. The combination of our joint forces is a fantastic opportunity: Saint-Gobain will bring significant value to CSR by leveraging our expertise on the various core segments of CSR’s operations for the benefit of its customers.
“I look forward to soon welcoming into our group all CSR employees, and to continuing the success story in Australia and New Zealand.”
The acquisition includes CSR's Building Products division, which is expected to generate A$2bn in sales and 17.7% earnings before interest, taxes, depreciation, and amortisation margin for the financial year ending March 2024.
CSR's brands are expected to complement Saint-Gobain's offerings in light and sustainable construction.
Additionally, CSR's property portfolio, valued at about A$1.3bn, is planned to be monetised in the short to mid-term.
The transaction is expected to close in the second half (H2) of 2024, subject to shareholder and regulatory approvals.
Saint-Gobain’s board of directors has unanimously approved the business combination, and CSR’s board has recommended that its shareholders vote in favour of the transaction.
The acquisition will be fully financed in cash and is expected to be value accretive by year three post-closing and earnings per share accretive from year one.
