SRC agrees to acquire CRH's European Lime Perimeter

The Power of the North Sea 

The North Sea has always been economically significant, with six countries bordering it, including Belgium, Britain, Denmark, Germany, the Netherlands, and Norway. It is characterised by its high density of infrastructure, population, and industry.  And, there is one resource that the North Sea has an infinite amount of: awful weather. The sea has an infinite amount of wind, with average wind speeds of ten meters per second, making it one of the gustiest areas in the world. In 2022, North Sea countries auctioned 25 gigawatts in wind power capacity, making it the busiest year yet, with nearly 30 gigawatts worthof tenders scheduled for the next three years. By 2050, the North Sea countries aim to install 150 gigawatts of wind power, equivalent to 24,000 of the world's largest turbines. But the North Sea region is also undergoing a transformation beyond the energy sector. Carbon capture and storage (CCS) projects are multiplying in the area, as the cost of CCS is decreasing and political resistance is easing. For example, the Netherlands has the Porthos project in Rotterdam, which would capture 2.5 million tonnes of CO2 annually for 15 years. Equinorand its partners have also completed drilling operations for a CO2 injection well near Bergen, Norway, as part of the Northern Lights project. Europe currently has more than 70 CCS facilities in various stages of development. The North Sea region is also becoming a hub for data processing and storage. The area has low electricity prices, a cold climate, an highly skilled workforce, and favorable data laws, making it an attractive location for data centers. New submarine data cables are being installed in the region, with demand for data centers projected to grow 17% annually until 2030.Major cloud companies such as Amazon Web Services and Microsoft Azure have already built server farms in the Nordics.

The sea is the answer Europe's shift towards renewable energy and a greener economy could draw more economic activity north. The abundant energy sources of the North Sea region, particularly wind and hydro power, have attracted companies involved in renewable energy, steel production, electric vehicle battery production, and wind turbine manufacturing. The move is expected to have a significant impact on Europe, both economically and politically. Aker Horizons, a renewable energy firm, aims to establish a green industrial hub in Narvik, Norway, powered by offshore wind. In Boden, Sweden, h2 Green Steel is building Europe's first new steel mill in half a century that will run on green hydrogen. The energy-intensive parts of the steel production process could move to where they can be done more efficiently, near renewable energy sources, while the labor- and knowledge-intensive parts could remain in Europe's steelmaking heartlands. Others moving north include industries such as makers of electric-vehicle batteries, which also require lots of energy to produce.  The new North Sea economy could have a profound impact onEurope. It could shift the balance of power within littoral countries, and giveEurope an economic and geopolitical boost. As SigmaRoc continues to expand whilst committing to our industry leading ESG targets, the Group aims to grow in the most dynamic region of Europe.

Key highlights

  • Transformational transactions
    Acquisition of lime businesses comprising of:
    Standalone businesses in Germany, Czech Republic and Ireland (“Deal 1”)
    Carve out of lime operations from the UK (“Deal 2”)
    Carve out of lime operations from Poland businesses (“Deal 3”)
  • Financial snapshot
    Total Enterprise Value attributed to the Transactions of €1b on a debt and cash free basis, including an upfront consideration of €825m and a €175m deferred element, financed through a combination of a new €875m debt facility from BNP Paribas and Santander, and a €230m ordinary equity raise fully underwritten by BNP Paribas and Santander.
  • Strategic vision
    SigmaRoc aims to further develop its regional leadership across Northern Europe in lime and limestone, tapping into diversified end-markets such as construction, steel, chemical, environment, food and agriculture.
  • Long-term cooperation
    In addition to SigmaRoc and CRH’s existing stone supply arrangements in Finland, both parties will cooperate in the future through further reciprocal stone supply agreements across several mutually strategic sites in the UK, Ireland and Poland, providing both parties with long term benefits from the extensive mineral reserves included as part of these Transactions.
  • Strong LTM trading
    SigmaRoc and CRH's lime perimeter have both demonstrated strong trading performance inFY22 and LTM 2023. Anticipated FY23 performance is expected to surpass initial expectations for both footprints.
  • Timeline
    Deal 1 expected to close in January 2024, with Deal 2 & Deal 3 later in Q1 and Q3 2024, respectively.

Become Northern Europe's leader in lime and limestone
by combining two complementary footprints

Strategic Rationale

  • Unique opportunity
    Combine two complementary footprints
  • Sector leader
    Create a lime and limestone leader in Northern Europe
  • Diversified end-markets
    Essential to the construction, steel, chemical, food and agriculture, and environment end-markets
  • Strategic OEM partners
    Future carbon capture utilisation and storage (“CCUS”) infrastructure will bring multi-jurisdiction OEMs and lime producers together
  • Potential EBITDA synergies of c. €30-60m
    Driving shareholder value through network optimisation, operational improvements, and economies of scale in procurement and support functions

From limestone to lime: One mineral essential for life

Lime and limestone market
Dynamics and role in sutainability

  • Lime and limestone essential to life
    Lime and limestone are integral to various industries
  • Stable demand
    Lime and limestone market demonstrates historically stable demand
  • Lime as a key resource in global sustainability
    Lime products are natural carbon sinks in various applications including water treatment, flue gas cleaning, soil stabilisation, steel and glass manufacturing. New applications for lime products aspart of a drive for sustainability include the production and recycling of lithium batteries as part of increasing electrification, the decarbonisation of construction including the substitution of cementitious material, and environmental applications including air pollution control residues cleaning, and direct air capture.
  • SigmaRoc's net zero ambitions
    CRH’s lime platform is aligned with SigmaRoc’s ESG and net zero ambitions and the Enlarged Group will be well positioned to be part of CCUS hubs and to have a strategic role in the decarbonisation of key industries such as steel and chemicals. CCUS hubs are planned in a number of the Enlarged Group’s operating countries and sit alongside the Group’s existing initiatives including its JV with ArcelorMittal in Dunkirk and its Aqualung pilot study in Sweden.

Enlarged Group: 5 regions and 16 core platforms

NOTE: All references to the Acquisition, the New Group or the Enlarged Group throughout this page assume exercise of call options.


How we get there