On Friday, Deutsche Bank updated its outlook on CRH Plc. (NYSE:CRH:LN) (NYSE: CRH), a leading global building materials group, by increasing its price target to £78.13 from the previous £76.60. The firm has maintained its Buy rating on the stock.
The adjustment in the price target follows CRH's completion of the acquisition of a majority stake in Adbri, a significant player in the building materials industry in Australia. This acquisition took place on July 1, 2024. The acquisition's impact on CRH's financial forecasts has been considered, especially in light of Adbri's expected contribution and the recent guidance raise provided by CRH.
Adbri, which was earlier known as Adelaide Brighton, was a publicly traded company on the Australian Securities Exchange before CRH increased its stake. CRH initially held a 65% interest in Adbri through a cash-settled derivative and subsequently raised its ownership to 57% by purchasing shares directly from the Australian market. The remaining 43% of Adbri continues to be owned by the private Barro Group.
Following the acquisition, CRH will consolidate Adbri's operations into its Europe Materials Solutions sector. The financial results of Adbri will be integrated into CRH's overall performance, with the Barro Group's portion being accounted for as a minority interest.
This strategic move is anticipated to strengthen CRH's market position and enhance its materials solutions offerings in Europe.
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