Shares of GCP Applied Technologies (GCP) - Get GCP Applied Technologies, Inc. Report jumped on Monday after the specialty construction chemicals maker agreed to be acquired by French counterpart Saint-Gobain in a deal that values the company at about $2.3 billion.
The Alpharetta, Georgia-based company will be paid $32 per share in cash, representing a premium of 39% above the company's 30-day trading average.
"We are thrilled for GCP to join Saint-Gobain, the ideal strategic partner to support our growth," GCP CEO Simon Bates said.
"Thanks to its global platform, significant resources as well as commercial and innovation expertise, Saint-Gobain is perfectly positioned to ensure the success of GCP’s operations and people over the long term.”
Saint-Gobain, one of the leading construction chemical companies in the world, expects post-merger total sales of more than 4 billion euros ($4.51 billion), up from 3 billion euros before the transaction.
Saint-Gobain CEO Benoit Bazin highlighted growth opportunities in the U.S. construction sector, especially considering the massive infrastructure plan that was recently signed into law by the Biden administration in a conference call announcing the deal, according to Reuters.
The transaction is expected to close by year-end 2022 and is still subject to shareholder approval.
Saint-Gobain expects synergy opportunities estimated at around $85 million by year five. The company says it expects a lot of growth as its admixtures and additives provide solutions to "de-carbonize the construction industry."
Shares of GCP were up 14.67% at $30.96 at lat check. Year to date the stock is up 31.74%; it is up more than 25% over the past 12 months.