Cie de Saint-Gobain offered to buy CSR Ltd for A$4.3 billion (US$2.8 billion) as the building industry continues to consolidate amid a shift to more climate-friendly materials.

The offer price of A$9 a share represents a 34% premium to CSR’s Tuesday closing price. CSR’s shares surged as much as 18% in Sydney to A$8.02, the highest since June 2008, after Bloomberg News reported on Saint-Gobain’s interest earlier on Wednesday, prompting a trading halt. 

Chief executive officer Benoit Bazin has been reshaping Saint-Gobain’s portfolio and leading a push to expand in key regions such as North America, part of efforts to focus on more environmentally-friendly materials. Saint-Gobain, founded during the reign of King Louis XIV and known for having made the mirrors of the Palace of Versailles, is one of the world’s biggest construction suppliers. It manufactures materials such as plasterboard used for partitions, soundproofing materials and glass for skyscrapers.

In recent years, Saint-Gobain has acquired companies including Canadian siding producer Kaycan Ltd and US specialty construction chemicals maker GCP Applied Technologies Inc, while divesting glass bottle maker Verallia SA.

The French company has been overhauling itself as rival Holcim Ltd of Switzerland also pursues a makeover, expanding with a series of acquisitions and plans announced last month to separate its fast-growing North American business to pave the way for a stock listing.

An acquisition of CSR could help Saint-Gobain diversify and boost growth in residential and commercial building products in Australia and New Zealand. 

Saint-Gobain’s shares have climbed about 28% in the past year, lifting the French company’s market value to almost €35 billion . The stock declined as much as 1.8% on Wednesday’s announcement.

Saint-Gobain employs 168,000 staff and has operations in 75 countries, according to its website. In addition to construction materials, the firm says it makes windows and parts for the automotive and wider transport sector, as well as products used in other industries such as health care.

CSR was founded in 1855 and its brands include Gyprock plasterboard and Bradford Insulation, according to its website. It has 2,600 employees in Australia and New Zealand.
 

  - Bloomberg