CRH, the world’s largest building materials group, has won shareholder approval to move its main listing from London to New York, in a bid to become more American. The group, which has a market capitalization of £29bn, already has a notable presence in North America, where it makes most of its profits, and the move is expected to bolster investor interest and help it expand further in the world’s largest economy. The company will maintain an ordinary listing in London, but its shares will no longer be traded in Dublin. This move follows that of UK-based Ferguson and betting firm Flutter, which relocated to the US earlier this year.
CRH Sees Significant Benefits in Representing Ourselves as a Truly American Company
CRH’s CEO, Albert Manifold, has emphasized that 75% of the group’s revenue comes from the United States, therefore, becoming more American would provide significant benefits for the company and for job creation in the US. The company sees its move as securing their position on an equal footing with their competitors, as it removes the fact that they traded in London, rather than in the US, as a disadvantage to growing that part of their business. Improved visibility will aid in making the group’s acquisitions arm more successful, with M&A spending totaling $3 billion last year and a good, solid pipeline ahead.
Wall Street Listing Will Bolster CRH’s Valuation
Analysts predict that a Wall Street listing will bolster CRH’s valuation, as the group currently trades at a discount to its US peers. However, some bankers have remarked that the company could see investor interest decline, as some London-based index funds sell their stock in response to the move to New York. Nevertheless, those who are in agreement are quick to praise the move, highlighting that it will result in the company being more likely to win business the world over, and Manifold is excited to find himself better positioned in what has become a greatly volatile environment.
Pipeline for Initial Public Offerings Drying Up in London
The news comes at a time when the pipeline for initial public offerings has dried up this year, with a fall in listings equivalent to that seen in 2009 and 2016. The COVID-19 pandemic has been blamed, which has led many investors to be cautious with regards to committing to new investments. The immediate future of the London or Dublin exchanges remains unclear, and with CRH declining to comment on the situation there, it’s likely that more businesses will follow CRH’s lead and move to the US with a view to strengthening their position in the world’s largest economy.
Summary:
CRH has been given the go-ahead to move its primary listing from London to New York and will maintain a secondary listing in London. The group believes that with 75% of its earnings coming from North America, this move will represent their position as a truly American company and boost their valuation and investor interest. The move has followed that of Ferguson and Flutter earlier this year, leaving the future of the London or Dublin exchanges unclear.
Wall Street Listing Provides CRH with a Wealth of Opportunity
The move from London to New York by CRH has provided the group with a way forward in a highly volatile market. The shift from European to American markets will allow the group to benefit from the Biden administration’s Infrastructure and Jobs Act and Chips and Science Act plans, which are designed to attract private sector investment. This is reflected in CRH’s CEO’s excitement that their position will put them on an equal footing with their competitors, creating greater wealth and opportunity for the group. The move has also bolstered the company’s investor’s confidence, as shown by the level of support from the shareholder base, who believes that this is the right decision for the group.
Future of the London and Dublin Exchanges Remains Unclear
As the pipeline for initial public offerings has dried up, the future of the London and Dublin exchanges remains unclear. Businesses are looking to strengthen their position in more stable markets, such as New York, where investment is continually increasing. An opportunity to invest in a company that has a strong presence in the United States is showing considerable potential, producing long-term gains for shareholders. This move by CRH is a reflection of the changing global financial times and their desire to maintain their position as a world leader in their field by securing their place as a truly American company.
In conclusion, CRH’s move to the US is a bold move that demonstrates the changing nature of the global financial market. The company’s desire to become more American will result in its investors benefiting long-term, showing the strength of the US market in attracting new investments. However, the move has shown an industry-wide trend of businesses relocating from London to New York, throwing the continuation of these exchanges into question and leaving Europe somewhat uncertain of the future. Nevertheless, this move by CRH shows great potential for companies looking to break into the US market and lays the groundwork for a more stable global financial system moving forward.
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The head of the world’s largest building materials group CRH said it could now become “a truly American company” after shareholders backed a plan to move its main listing from London to New York.
CRH, which has a market capitalization of £29bn and makes most of its profits in North America, deepened fears about the future of the London stock market when the group announced its intention in March.
At an extraordinary shareholders’ meeting near Dublin on Thursday, CRH won the approval of more than 95% of investors for a move the company says will boost its valuation and help it win more business in the world’s largest economy. world.
“We see significant benefits in representing ourselves as a truly American company: 75% of our earnings are in the United States,” said Albert Manifold, chief executive officer, after the vote.
Manifold anticipated “significant benefits for those companies that provide jobs for Americans and also help the economy” under US President Joe Biden’s Infrastructure Investment and Jobs Act and Chips and Science Act, which are designed to attract private sector investment.
“So we see ourselves finally positioned on an equal footing with our competitors in what is a very competitive environment,” he added.
The approval clears the way for the main listing to go on the New York Stock Exchange on September 25. Under the plan, the group will maintain an ordinary listing in London but its shares will no longer be traded in Dublin.
CRH follows in the footsteps of UK-based plumbing equipment supplier Ferguson, which has already moved its listing to the US, and Flutter, the betting company, whose shareholders approved a similar move in April. Japan’s SoftBank also rejected the London listing of Cambridge-based chip designer Arm.
The companies’ departure from London comes as the pipeline for initial public offerings has dried up this year. Manifold declined to comment on the future of the London or Dublin exchanges.
CRH, an acquisitions firm that spent $3 billion on M&As last year with a “good, solid pipeline ahead,” will find it easier to do business in the United States, Manifold said.
“We didn’t have that advantage at our disposal because we got traded. . . in London rather than in the US and that, we believe, will help us grow that part of our business as well. . . It gives us more arrows in our quiver as we go buy companies,” he added.
Analysts say a Wall Street listing will bolster CRH’s valuation as the group trades at a discount to U.S. peers, but some bankers have warned the company could see near-term success as London-based index funds sell earlier. of the move to New York.
Jim Mintern, chief financial officer, declined to comment on that speculation, but insisted “for long-term shareholder value creation, you can see the level of support we have here from the shareholder base. They think it’s the right thing.”
https://www.ft.com/content/90a9e46e-ce6d-4787-b933-adfc27b94792
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