Cement Australia buys BGC’s cement assets for close to $800m

Cement Australia has snapped up assets in Western Australia from BGC. Picture: iStock

Cement Australia has bought BGC’s Cementitious division for up to $800m, fending off competition from the country’s largest building materials provider Boral.

The deal sees the European-owned group pick up some of the most valuable and strategic assets in Australia’s building material industry, once owned by the late billionaire Len Buckeridge, in what will be a major test for the industry in terms of the level of ownership concentration allowed by the competition watchdog.

BGC has been on and off the market by his family since 2018, and the latest Macquarie Capital-advised deal sees Cement Australia buy Western Australia quarries and a cement terminal, the assets that were the jewel in the empire’s crown.

The sale will complete in the second half of 2025 and gives Cement Australia a Western Australia presence in cement.

The BGC assets were generating between $60m and $80m of annual earnings before interest, tax, depreciation and amortisation.

BGC has been on and off the market by the late Len Buckeridge’s family since 2018.

Cement Australia, which was advised by UBS, is a joint venture between European companies Heidelberg Materials Australia and Holcim and was taking part in a sale process set to conclude this month.

It has the second largest player in the Australian cement industry behind the CRH-owned AdBri.

Sources said it paid a price in the high $700m range, equating to a multiple of about 10 times EBITDA.

Other suitors for the assets included SGH’s Boral, majority owned by Western Australia billionaire Kerry Stokes, and AdBri, while Maas Group was also thought to have been a contender.

But in the final stages in the race, it was down to Boral and Cement Australia, with BGC announcing the outcome Tuesday.

BGC said in a statement it retained a significant business of about 1,000 employees, centred around the growing residential construction industry.

This includes Midland Brick, the BGC Building Products division and the BGC Housing Group.

Analysts say building materials are attractive because of the lack of housing supply.

Cement Australia has a sizable presence in Australia, where it sells cement, supplementary cementitious materials and quicklime, concrete, mortar and render and sands and additives.

Its cement assets, including quarries and grinding mills, are located mainly across the east coast and it had no cement business on the west coast until now.

However, given it sells concrete in WA, making the latest acquisition would be complementary, it may raise attention from the Australian Competition and Consumer Commission.

Cement Australia also has cement factories in Railton, Tasmania and Gladstone, Queensland.

It has cement terminals in South Australia, Brisbane and NSW, and Heidelberg and Holcim have concrete plants and quarries in every state.

The brands of Heidelberg Materials include Hymix, Pioneer North Queensland, Placecrete, Traino, Alex Fraser and Suncoast Asphalt.