(Bloomberg) -- French building materials maker Cie. de Saint-Gobain agreed to buy U.S. specialty construction chemicals maker GCP Applied Technologies Inc. for about $2.3 billion in a bet on growth from U.S. President Joe Biden’s infrastructure plan.
Investors will receive $32 for every GCP Applied share in a deal financed through cash, Saint-Gobain said Monday. That’s 18% higher than Friday’s closing price. Bloomberg reported last week that Saint-Gobain was among suitors considering the purchase.
“We are very confident in the American market,” Chief Executive Officer Benoit Bazin said on a call with reporters, noting the U.S. administration’s ambitious spending plans on infrastructure will fuel demand for cement and other materials.
Saint-Gobain has pushed aggressively into the North American market in recent years, agreeing to buy U.S. drywall maker Continental Building Products Inc. in a deal worth $1.4 billion, including debt, in 2019 and laying plans for new factories in the region. Bazin said he’s had his eye on GCP for several years.
Saint-Gobain rose as much as 1.6% in Paris. The shares have climbed 56% this year.
The accord is further evidence dealmaking in the industry is heating up as construction rebounds from the worst of the pandemic last year. European rival Sika AG agreed in November to acquire MBCC Group, the former construction-chemicals unit of BASF SE, for 5.5 billion Swiss francs ($6 billion). That deal built on Sika’s 2019 purchase of mortars business Parex Group for 2.5 billion Swiss francs.
GCP conducted a strategic review in 2019 but failed to find a buyer. Saint-Gobain on Monday said it would keep GCP’s turnaround plan, made more solid by new management after years of turmoil. This will help extract synergies worth $85 million including in roofing and building facades. It expects the deal to close by the of next year.
For Saint-Gobain, an acquisition of GCP Applied would build on its recent purchase of Chryso, a French construction chemicals business, for 1 billion euros ($1.1 billion). The deal would bolster the group’s position in construction chemicals, a technology that Bazin said can dramatically lower carbon emissions in products like cement through the use of additives.
GCP has about $1 billion in annual revenue and 50 manufacturing sites in 38 countries, employing around 1,800 people, according to the statement.
(Updates with shares in fifth paragraph)
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