Summit Materials makes $3.8bn rival bid for Ash Grove Cement

Updated 07 October 2017
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Summit Materials makes $3.8bn rival bid for Ash Grove Cement

DUBLIN: Summit Materials, a US construction firm set up by former CRH executives, has made a rival offer for Ash Grove Cement, which CRH has agreed to pay $3.5 billion for, a source said.
Ash Grove said on Friday it had received a bid valued at $3.7-$3.8 billion which it expects to result in a better offer to the deal struck last month with CRH, the world’s third-largest building materials supplier.
A source familiar with the matter said the unnamed bidder was Summit, which could not be reached for comment, and it had submitted its bid on Thursday. The offer is being considered by Ash Grove’s board, the source added.
Ireland’s CRH said that its proposal remains in place, subject to approval from Ash Grove shareholders.
Ash Grove has set a meeting on Nov. 1 for shareholders to vote on the agreement with CRH, which its board unanimously approved last month, but has extended its go-shop period during which it can look for other potential buyers to Oct. 20, the cement company said in a statement.
Prior to setting up fast-growing Summit in 2009, the Denver materials group’s chief executive Thomas Hill headed up CRH’s North American arm and went on to poach a number of other senior US-based CRH executives.
Summit’s bid would surpass its own value of $3.65 billion. CRH, which has a market capitalization of $26.3 billion and said last month that it had around €5 billion available to spend on acquisitions over the next 18-24 months, made an all-cash bid.
CRH is also Ash Grove’s largest customer and would be owed a $131 million termination fee if the Kansas-based company sells to another party.
“Summit Materials opportunistic offer of an Ash Grove merger will likely see investors decide between a cash offer at a 60 percent premium or a merger that gives no certainty to a cash exit price for large Ash Grove investors,” said Darren McKinley, analyst at Dublin-based Merrion Stockbrokers.
“Given CRH’s position as Ash Grove’s largest customer, they are well placed to determine whether a higher offer makes sense or whether to let Ash Grove shareholders decide whether they want cash in hand now or to merge with a company that currently doesn’t pay a dividend.”
— Reuters


IMF warns G20 economic leaders that tariffs hurting global economy

Updated 22 July 2018
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IMF warns G20 economic leaders that tariffs hurting global economy

BUENOS AIRES: The International Monetary Fund (IMF) warned world economic leaders on Saturday that a recent wave of trade tariffs would significantly harm global growth, a day after US President Donald Trump threatened a major escalation in a dispute with China.
IMF Managing Director Christine Lagarde said she would present the G20 finance ministers and central bank governors meeting in Buenos Aires with a report detailing the impacts of the restrictions already announced on global trade.
“It certainly indicates the impact that it could have on GDP (gross domestic product), which in the worst case scenario under current measures...is in the range of 0.5 pct of GDP on a global basis,” Lagarde said at a joint news conference with Argentine Treasury Minister Nicolas Dujovne.
Her warning came shortly after the top US economic official, Treasury Minister Steven Mnuchin, told reporters in the Argentine capital there was no “macroeconomic” effect yet on the world’s largest economy.
Long-simmering trade tensions have burst into the open in recent months, with the United States and China — the world’s No. 2 economy — slapping tariffs on $34 billion worth of each other’s goods so far.
The weekend meeting in Buenos Aires comes amid a dramatic escalation in rhetoric on both sides. Trump on Friday threatened tariffs on all $500 billion of Chinese exports to the United States.
US Treasury Secretary Steven Mnuchin will try to rally G7 allies over the weekend to join it in more aggressive action against China, but they may be reluctant to cooperate because of US tariffs on steel and aluminum imports from the European Union and Canada, which prompted retaliatory measures. .
The last G20 finance meeting in Buenos Aires in late March ended with no firm agreement by ministers on trade policy except for a commitment to “further dialogue.”
German Finance Minister Olaf Scholz said he would use the meeting to advocate for a rules-based trading system, but that expectations were low.
“I don’t expect tangible progress to be made at this meeting,” Scholz told reporters on the plane to Buenos Aires.
Mnuchin told reporters on Saturday that he has not seen a macroeconomic impact from the US tariffs on steel, aluminum and Chinese goods, along with retaliation from trading partners.
But he said there have been microeconomic effects on individual businesses, he said, adding that the administration was closely monitoring these and looking at ways to help US farmers hurt by retaliatory tariffs.
The US dollar fell the most in three weeks on Friday against a basket of six major currencies after Trump complained again about the greenback’s strength and about Federal Reserve interest rate rises, halting a rally that had driven the dollar to its highest level in a year.