...M&A Transforms Industry: Mega deals are shaping the industry and changing the face of companies in the sector for many years to come. The most prominent examples are the merger between the world's largest cement manufacturers, Holcim Ltd and Lafarge SA, to create LafargeHolcim Ltd (BBB/RWN), CRH plc's (BBB/Negative) EUR6.5bn acquisition of LafargeHolcim's global assets, and HeidelbergCement AG's (BB+/Stable) acquisition of Italcementi SpA. Leverage Constrains Ratings: Companies in the consolidated building materials sector benefit from investment-grade business profiles, but suffer from sub-investment grade financial profiles. Balance sheets across the sector have grown and deleveraging has been delayed as a result of M&A. Financial structures are now many notches below companies' IDRs. However, Fitch Ratings expects these companies to reduce leverage over the coming years, as they focus on deleveraging through disposals, capital increases and earnings growth. Improved Business Profiles:...
