Shares of Holcim Ltd., a Swiss-based cement and building materials company, experienced a significant boost in value on Monday following its announcement of plans to spin off its North American unit and list its shares in the U.S. This decision comes 15 months after Holcim's subsidiary, Lafarge, pleaded guilty to paying millions of dollars to the Islamic State group in order to keep a plant operational in Syria. As part of the settlement with U.S. authorities, Lafarge agreed to pay approximately $778 million in penalties.
The spinoff and listing of shares is expected to be completed within the first half of next year. Through this move, Holcim aims to create a North American unit that is projected to achieve more than $20 billion in net sales by 2030. It should be noted that Holcim will retain its listing on the Swiss SIX stock exchange.
Jan Jenisch, Chairman and CEO of Holcim, will lead the North American operations while Miljan Gutovic, an Australian national and an executive committee member, will assume the role of CEO for Holcim on May 1. In a statement, Jenisch expressed confidence that the U.S. listing would unlock the company's potential to become an appealing partner to customers, particularly in one of the world's most attractive construction markets.
Following the announcement, Holcim shares experienced a notable increase in value. In midmorning trading on the Swiss SIX stock exchange, shares surged by 4.3% to 67.02 Swiss francs (approximately $77.78) per share. The stock price even peaked at 67.96 francs, representing a nearly 6% increase shortly after the market opened.
Holcim's decision to spin off its North American unit and list its shares in the U.S. showcases the company's strategic focus on optimizing its operations and tapping into the potential of the lucrative American construction market. While the past legal troubles of its subsidiary Lafarge have weighed on the company, this move is seen as an opportunity for Holcim to regain investor confidence and forge a successful path for growth and profitability.
