- German cement maker unveils plan for Italy profitability
- Savings goal from Italcementi purchase kept at EU400 million
HeidelbergCement AG will cut jobs in Italy and sell assets in Belgium as it absorbs Italcementi SpA, which the German cement maker agreed to purchase last year.
The reorganization aimed at returning the Italian business to profitability will affect about 400 of the 2,500 positions in the country, HeidelbergCement said in a statement. Approval for the acquisition is being sought from European and U.S. regulators and the deal is expected to close in early July, it said.
In a bid to address possible antitrust concerns, HeidelbergCement will sell Italcementi’s Belgian operations, primarily Cie. des Ciments Belges SA, according to the statement. The plan, to be carried out with the help of BNP Paribas, “would remove all overlaps between the activities of HeidelbergCement and Italcementi in Belgium and the Netherlands,” according to the statement.
HeidelbergCement, which is the world’s second-biggest supplier, agreed in July to acquire an initial 45 percent stake in Bergamo, Italy-based Italcementi for 3.7 billion euros ($4.2 billion) to counter the merger of two larger peers into LafargeHolcim SA and to bolster business in southern Europe and Africa. The German cement producer has been aggressively trying to wring savings from the combination, raising a forecast earlier this year to 400 million euros.
Shares of HeidelbergCement declined 0.7 percent to 72.45 euros as of 9:06 a.m. in Frankfurt. They have dropped 4.2 percent since the start of the year, valuing the company at 13.6 billion euros.
“We will be able to achieve the planned 400 million euros in synergies and bring Italcementi back to profits by operational improvements, streamlining the administration and leveraging the increased size of our combined business,” HeidelbergCement Chief Executive Officer Bernd Scheifele said in the statement late Tuesday.
As part of the revamp, 170 people at Italcementi will be offered jobs at other HeidelbergCement offices while between 230 and 260 people based in Bergamo may be let go. The overhaul will take until the end of 2020.