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Holcim shares rise after announcing plans to spin-off North America unit

Published 01/29/2024, 01:53 PM
Updated 01/29/2024, 01:56 PM
© Reuters.  Holcim shares rise after announcing plans to spin-off North America unit
(Updated - January 29, 2024 1:53 PM EST)

Swiss company HLN announced over the weekend that it plans to spin off its North American business and list it in the US in the first half of 2025.

The move could create a new company worth around $30 billion, according to reports. Holcim (SIX:HOLN)'s shares were one of the better performers in Europe on Monday.

Reacting to the news, analysts at Citi, who have a Buy rating and CHF 75 price target on the stock, explained that the North America business spin-off plan is driven by the different strategic focus of the two businesses going forward and the intention to equip both with adequate and appropriate capital structures.

"The NAM business is positioned to capitalize strong construction spending in the region underpinned by elevated infrastructure investments, while the ex-NAM business continues to strategically focus on decarbonization-driven growth," the analysts wrote.

"The spin-off is expected to be structurally straightforward given the current regionalized set-up, and the new pure-play US building solution company envisages being S&P 500 inclusion (mgmt confirmed all criteria for inclusion should be met)," the analysts at Citi added.

The ex-NAm business is expected to remain in the Swiss Market Index.

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