ZURICH (Reuters) - LafargeHolcim (LHN.S) has distanced itself from bidding for BASF’s (BASFn.DE) construction chemicals business, with the cement maker’s Chief Executive Jan Jenisch saying his company has no plans for large acquisitions at the moment.
After divesting some businesses and using the proceeds to pay down debt, the Swiss company would look at smaller deals and investing in its existing operations, Jenisch said.
Large deals were unlikely, with big acquisitions being considered only to accelerate growth at company’s newly formed solutions business which makes products like precast paving stones and mortars.
“It’s not like we have a couple of billions we want to throw at anyone. We are quite happy to have this new solid balance sheet, and have no plans to go back to big debt,” Jenisch told reporters.
“A big acquisition would have to tick a lot of boxes, and that is looking unlikely at the moment,” he added.
The priority would be to keep the company’s debt below the level of two times its operating profit, a target it is on course to reach this year.
BASF’s construction chemicals business was an attractive business, which would have been a good addition to LafargeHolcim’s operations, Jenisch said.
But a deal for the business - which analysts estimate could fetch up to 3 billion euros ($3.33 billion) - was complicated, he said without firmly ruling out an approach.
“It is a difficult transaction. BASF announced the divestment a year ago. It is not an easy transaction and I like easy transactions,” he said.
Reporting by John Revill; Editing by Michael Shields