The world’s largest building materials company CRH is planning to move its listing from London to New York in a fresh blow to the UK’s capital market.
The company, which has a market capitalisation of almost £30bn, is the latest UK-listed company to embark on a move to New York. Last year, Ferguson, the plumbing and heating products supplier, left the FTSE 100 after moving its primary stock market listing to Wall Street. Flutter, the world’s largest publicly traded gambling company, is also considering its options.
Flutter shareholders are set to vote on a US secondary listing at its annual general meeting in April. Peter Jackson, chief executive, told the Financial Times that if the move was approved by 75 per cent of shareholders, the company could “consider switching our primary listing”.
He added that early feedback from shareholders was “supportive” and that a US listing would yield “long-term strategic and capital market benefits”.
Earlier this week, the Financial Times also reported that Shell’s top executives explored moving the Anglo-Dutch energy group to the US.
CRH said on Thursday that it would recommend to shareholders a switch of its primary listing to the US in 2023. It said North America now represented about three-quarters of earnings, and would be a key driver of future growth.
“Our exposure to this market is likely to increase further driven by substantial increases in infrastructure funding, a renewed drive for the onshoring of manufacturing activity and significant levels of under-build in the residential construction market,” CRH said.
Analysts said a switch to the US would allow CRH to command a higher valuation and give the group more access to shareholders in its biggest market. UBS said the shift to a US listing could lead to a “multiple re-rating given US peers trade on roughly 25x [price to earnings] vs CRH on 13x”.
Shares in CRH rose more than 9 per cent in early trading in London.
CRH has had a London primary listing since 2011, but also has a secondary listing in Dublin, where it is headquartered. The company did not say what the plans were for Dublin.
Asked about the move on Thursday, David Schwimmer, chief executive of the London Stock Exchange, said: “If companies are going to make decisions when most of their business is in the US, that sort of is what it is.”
The London market has been hit by a wave of takeovers and take-private deals in the tech sector that risks further stripping it of large listed companies, including Kape Technologies, Aveva, Micro Focus and cyber security company Avast. Some companies are also choosing to list their shares in the US, particularly the tech sector, to access deeper pools of capital and a broader range of analyst and specialist financial services.
Bloomberg reported this week that SoftBank-owned UK tech group Arm decided against a London listing and would focus on the US instead.
CRH told analysts at a presentation on Thursday that it saw the opportunity for further growth in the US given President Joe Biden’s Infrastructure Investment and Jobs Act, which will fund road building, telecommunications, water and sewage infrastructure. The company also wants to fund its M&A strategy through the use of US shares.
The company works on large construction projects across Europe and the US, including London’s Crossrail line and the HS2 railway line in the UK.
Additional reporting by Oliver Barnes and Nikou Asgari in London