Holcim Completes Acquisition of Xella for 1.8 Billion Euros

Holcim, the global giant in the production of building materials, has finalized the mega-deal to acquire the German group Xella for 1.85 billion euros. The transaction underwent rigorous regulatory scrutiny, with the European Commission (EC) approving the acquisition subject to conditions to prevent a monopoly in the Balkan market.

The deal has a direct strategic impact on the construction sector in Bulgaria, where both companies own key production assets.

Which companies are involved in the deal, and what is their presence in Bulgaria?

The buyer, Holcim, is a global leader in sustainable construction solutions. On the Bulgarian market, the group operates through “Holcim Bulgaria.” The company owns the cement plant in the village of Beli Izvor (Vratsa Province) and holds key positions in the production of ready-mix concrete (with facilities in Sofia and Plovdiv) and quarry materials.

Xella is an established European pioneer in the wall systems segment, headquartered in Duisburg, Germany; it operates in 22 markets and employs over 4,000 people. In Bulgaria, the local company “Xella Bulgaria” owns a plant in Sofia and is the undisputed market leader in autoclaved aerated concrete under the Ytong brand.

According to Holcim’s official data, as outlined in its global strategy “NextGen Growth 2030,” the goal of the acquisition is for half of the group’s revenue to come from ready-made, high-tech building systems – rather than from the sale of raw cement – by the end of the decade.

For the Bulgarian market, this merger is a game-changer through so-called “cross-selling.” Until now, the two companies operated in parallel niches – one supplied cement and concrete for the structure, while the other supplied wall blocks. Now, construction contractors in Bulgaria will be able to source complete systems from a single supplier: from low-carbon concrete for foundations, through Ytong wall blocks, to roofing systems.

What exactly does the acquired portfolio include?

Holcim’s official announcement makes it clear that several leading brands are joining the group, with projected total net sales for 2026 amounting to 1 billion euros:

• Ytong and Hebel: Modular systems made of autoclaved aerated concrete with high thermal efficiency, designed for the circular economy (easy recycling);
• Silka: Silicate products (blocks) that provide exceptionally high load-bearing capacity and sound insulation for buildings;
• Multipor: Mineral insulation panels for energy-efficient retrofitting and renovation;
• blue.sprint: Xella’s innovative digital solution. This platform integrates artificial intelligence (AI) and Building Information Modeling (BIM), linking architects’ 3D models directly to automated factory production for maximum delivery efficiency.

Holcim forecasts achieving €60 million in annual synergies (operational savings from integrated management) at the EBITDA level by the third year. The transaction is expected to lead to an increase in earnings per share (EPS) and free cash flow as early as the first year, as well as an increase in return on invested capital (ROIC) by the third year.

The Regulatory Filter

Due to the enormous global and European revenues of the two conglomerates, the deal came under the direct supervision of the European Commission in Brussels in accordance with the EU Merger Regulation. In its official decision, the European Commission approved the acquisition, but subject to conditions.

To protect competition in the regional market of the Balkans (including Bulgaria), the EC required Holcim to divest its own aerated concrete plant in Ajud, Romania. According to the EC’s antitrust analysis, if Holcim had retained its Romanian plant and simultaneously acquired Xella’s Ytong brand, the new mega-entity would have achieved excessive market concentration in the region, which would have threatened independent dealers and competitors.

Translated with DeepL.