Bulletin: Heidelberg Materials' Solid Credit Metrics Can Absorb The $600 Million Acquisition Of Giant Cement

This report does not constitute a rating action. FRANKFURT (S&P Global Ratings) Dec. 3, 2024--S&P Global Ratings today said that Heidelberg Materials AG (BBB/Stable/A-2) can absorb the acquisition of the U.S. cement producer Giant Cement Holding Inc. without affecting its credit quality, given its strong credit metrics for the 'BBB' rating, which are the result of a solid performance achieved in past few years. Factoring in this $600 million acquisition in 2025, we continue to forecast a slight decline in S&P Global Ratings-adjusted funds from operations (FFO) to debt to 40%-45% in 2024, before rising to 45%-50% in 2025, from a high of 45.4% in 2023, indicating ample rating headroom. On Nov. 28, 2024, Heidelberg Materials announced that it had

...December 3, 2024 This report does not constitute a rating action. FRANKFURT (S&P Global Ratings) Dec. 3, 2024--S&P Global Ratings today said that Heidelberg Materials AG (###/Stable/A-2) can absorb the acquisition of the U.S. cement producer Giant Cement Holding Inc. without affecting its credit quality, given its strong credit metrics for the '###' rating, which are the result of a solid performance achieved in past few years. Factoring in this $600 million acquisition in 2025, we continue to forecast a slight decline in S&P Global Ratings-adjusted funds from operations (FFO) to debt to 40%-45% in 2024, before rising to 45%-50% in 2025, from a high of 45.4% in 2023, indicating ample rating headroom. On Nov. 28, 2024, Heidelberg Materials announced that it had entered into a definitive purchase agreement to acquire Giant Cement, a cement producer on the U.S. East Coast. Giant has an annual capacity of 800,000 tons of cement and fuel recycling assets to generate waste-derived fuels. We view...

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