Saint-Gobain Group

To acquire Continental Building Products for $1.4bn

  • Sectors : Building products
  • Companies : Saint-Gobain Group

Ratings and price correct at time of issue.

  • Saint-Gobain Group

    Closing Price: 3805c

  • RATING 09/01/19

  • PREVIOUS RATING 07/09/15

    OUTPERFORM

DAVY VIEW

Saint-Gobain (SGO) is to use disposal proceeds to acquire US plasterboard manufacturer Continental Building Products for $1.4bn. The deal sees the group expand its market share in the US, acquiring a high-margin competitor with significant synergy potential. The strategic rationale appears sound even if the price paid seems high, especially given the point in time in the US construction cycle. While debt levels will not be stretched, the deal raises questions about use of disposal proceeds where debt paydown was the expected outcome.

Download full report with analyst certification and important disclosures

Nov 13 2019, 08:15 GMT

Download