(Bloomberg) — Swiss construction company Holcim Ltd. is considering a dual US and Swiss listing of its North American unit, according to people familiar with the matter.
Most Read from Bloomberg
The company said in January that it will spin off its North American business into a separate US-listed entity, which could be valued at more than $30 billion. A dual listing is among options being considered, and no final decision has been made, said the people, asking not to be identified because the information was private.
The considerations around a dual listing come because Swiss and other European funds may have to sell the new Holcim shares listed in the US, some of the people said. That would result in a so-called flow back of shares that would weigh on the unit’s share price and potentially limit its inclusion in a large US index, they said.
At the same time, the company has to weigh the risk that a dual listing could result in lower trading volumes for the US stock, though a Swiss listing would help the unit retain investors at home, the people said. At least 30% of Holcim’s shareholders are based in Switzerland, according to data compiled by Bloomberg.
Preparations for the North American spinoff also include discussions about the new entity’s headquarters. The new US unit is set to be headquartered in Zug, Switzerland, due to tax advantages, while its operational base will be in Chicago, one of the people said.
A representative for Holcim declined to comment.
Should it materialize, a dual listing could be welcome news for European markets at a time when the region is facing stiff competition from US exchanges.
“A dual listing would keep European investors engaged, maintaining visibility in Europe, which could be seen as beneficial for the continent,” said John Plassard, a director at Mirabaud & Cie. “However, listing only in the US could enhance liquidity, align the unit with US peers, and attract more institutional investors.”
Irish construction materials group CRH Plc moved its primary listing from London to New York last year, while Swedish buy-now-pay-later giant Klarna Bank AB is considering an initial public offering in the US, Bloomberg News has reported. Greece’s Titan Cement International SA is planning to float its US operations, while UK broker TP ICAP Group Plc is mulling listing its data business in New York.
Holcim is seeking to benefit from rapid US market growth as builders race to relieve a lack of single-family homes and meet regulatory pressures for more energy-efficient buildings. Chairman and former Chief Executive Officer Jan Jenisch said in February that he values Holcim’s North America business at around $50 billion because it is likely to see faster growth than its European counterpart after the separation.
The stock has gained about 31% since the cement giant announced the spinoff plans in late January.
–With assistance from Pablo Mayo Cerqueiro.
(Updates with analyst comment and more context from eighth paragraph.)
Most Read from Bloomberg Businessweek
©2024 Bloomberg L.P.