Irish insulation company Kingspan has made a 700 million euro offer for the insulation and flexible foams units of Belgium's Recticel, it said on Tuesday.

The company has also struck a deal with a third party to sell on the flexible foams businesses if the acquisition goes ahead, it said.

The deal would tighten Kingspan's grip on the European insulation market, where Recticel's unit has manufacturing facilities in Belgium, France, Britain and Slovenia.

Kingspan generates around a fifth of its sales in Britain, although that reliance has been falling as it diversified further into Europe.

Kingspan shares were 3.3% higher at 1010 GMT, while Recticel's were suspended from trading having climbed 20.8%.

The flexible foams business made up 41% of Recticel's 1.5 billion euros of annual sales in 2017, with the insulation unit contributing 18%. The remainder was made up from its bedding and automotive units.

Kingspan has spent just over 1 billion euros on a number of acquisitions over the last two years, mainly building up a presence in North, Central and South America.

Acquisitions contributed 17% to the Irish company's sales growth last year, when it recorded record annual revenues of 4.4 billion euros.

Recent purchases including Spain's Synthesia group and Balex Metal, a Polish based manufacturer of insulated products, helped push the contribution from mainland Europe to almost half of all sales. (Reuters)

Source: www.businessworld.ie