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13 November 2019 By Christopher Thompson Follow @CGAThompson

The $22 bln construction company is buying Virginia-based Continental for $1.4 bln. CEO Pierre-André de Chalendar is paying a full price to ease his reliance on Europe. Even with hefty cost savings, the French group’s shareholders face a long wait to make an acceptable return.

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French construction material producer Saint Gobain said on Nov. 12 that it has agreed to buy U.S. company Continental Building Products, valuing the group at $1.4 billion including debt.

Continental, which makes gypsum wallboards, will be merged into a newly formed unit of Saint Gobain. The deal has been approved by both companies’ boards.

In a statement Saint Gobain said it will pay $37 per share in cash, representing a 34.4% premium to Continental’s volume weighted average price for the 60 trading days ending Nov. 11.

The company added that the acquisition would generate $50 million of cost synergies by the end of the third year following the closing of the transaction.

Saint Gobain shares were down 3% at 37.06 euros by 1130 GMT on Nov. 13.

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