Holcim’s U.S. spinoff suggests the end of globalization is closer than we thought

Over the weekend, Holcim, a Fortune Global 500 company and one of the largest construction material companies in the world, announced plans to spin off its U.S. division.

Holcim USA has been the largest, fastest growing, and most profitable part of the Switzerland-based company. On its own, the U.S. division will be the “leading pure-play North American building solutions company,” its parent company claimed. So why would Holcim want to spin off its crown jewel? The answer is simple: It’s in the shareholders’ interest, Holcim said.

Here’s how it works: As of this writing, Holcim had a market capitalization of roughly CHF 39 billion ($45 billion). But according to Jan Jenisch, Holcim’s outgoing global CEO and incoming U.S. division CEO, “the North American business could be valued in the ‘ballpark’ of $30 billion despite just accounting for about 40% of sales last year,” the FT reported yesterday. 

If that makes you blink in confusion, you’re not the only one. The era of globalization was meant to erase arbitrage and other hocus pocus between financial markets, limiting the variability in company valuations depending on where they’re listed.

But this part of globalization seems to have come to an end. Thanks to American growth and protectionism, it once again pays to be made and listed in the United States.

When I spoke to Jenisch this fall for a Fortune feature story on Holcim, he told me just how transformational the Biden administration’s green industrial policy has been. “The Build Back Better bill, and the famous IRA, it helps a lot, it sets the framework,” he told me. “They are supported by the government and tax credits. It sets the right incentives.”

These government incentives, combined with the ever-increasing growth rate gap between the U.S. and European economies, has convinced Jenisch that Holcim USA will “unlock value” for its shareholders almost immediately. The spun-off U.S. company is aiming to nearly double its sales by 2030, and, based on that glowing prospect, its share price may well soar from the get−go.

If Holcim becomes a textbook case of increasing shareholder value in the 21^st century, though, the end of globalization may be nearer than we previously thought. And in the current macroeconomic environment, that would be bad news for every economy—except the exceptional American one.

More news below.

Peter Vanham
peter.vanham@fortune.com
@petervanham

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This edition of CEO Daily was curated by Nicholas Gordon.