Quikrete, a major North American manufacturer of packaged concrete and cement mixes, is in the final stages of negotiations to acquire Denver-based Summit Materials (NYSE:SUM), a provider of construction materials such as ready-mix concrete and asphalt, the Wall Street Journal reported Thursday afternoon, citing sources familiar with the matter. The sources anticipate that a deal announcement could be announced as early as next week, provided the current discussions do not break down.
Summit Materials saw its stock climb over 7% following the news.
Before this news, Summit had publicly acknowledged in October that it received a nonbinding acquisition proposal and was in preliminary talks with an interested party, although it did not disclose specifics. Last month, Bloomberg reported that Quikrete had initiated conversations with Summit regarding a potential deal.
The building-materials sector has been experiencing a wave of deal activity, driven in part by increased government spending on infrastructure projects across the United States and the anticipation of sustained demand for construction materials. In a strategic move last year, Summit announced its intention to merge with the U.S. operations of Cementos Argos, a Colombian concrete manufacturer.
This potential acquisition by Quikrete is seen as a strategic consolidation within the industry, which could position the combined entity to capitalize on the growing market demands. The financial terms of the deal have not been disclosed, and both Quikrete and Summit Materials have yet to issue formal statements regarding the acquisition.
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