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Irish building materials firm CRH has entered into a definitive merger agreement with US cement manufacturer Ash Grove Cement Company.

The transaction, which has been unanimously approved by Ash Grove’s board of directors, values the Kansas-based firm at US$3.5 billion.

CRH will pay Ash Grove’s shareholders between $449 and $454 per share, said Ash Grove in a statement – up to 59% more than their recent valuation on the New York stock exchange.

Charlie Sunderland, chairman of the Ash Grove board, said, “CRH, as our largest customer, has enjoyed a close and highly productive relationship with Ash Grove for many decades. The board of directors believes that CRH will be able to take Ash Grove to its next phase of development after 135 years in operation and over a century under the stewardship of the Sunderland family.”

Following the announcement of the merger agreement, CRH shares rose 2.1% to 2,711 pence on the London stock exchange, giving the firm a market value of £23 billion ($31 billion).

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