May 31, 2018 / 10:06 AM / 7 months ago

UPDATE 1-Ireland's CRH to merge units, shares surge on growth targets

(Adds details, share price, analyst quote)

DUBLIN, May 31 (Reuters) - Irish building materials group CRH said on Thursday it would streamline some of its European and American businesses under one division and detailed growth targets that boosted its shares by almost 5 percent.

CRH will combine its Europe Distribution, Europe Lightside and Americas Products businesses into a new global products division from next year, a move it said would provide significant opportunities for growth and value creation.

The world's third-largest building group by market capitalisation said the simpler, leaner structures would help it improve its core earnings (EBITDA) margin by 300 basis points by 2021.

Shares in the group were 4.5 percent higher at 2,800 pence by 0945 GMT, close to its highest level this year and making it the biggest riser in Britain's top share index.

CRH, which has grown to a global giant employing over 85,000 people through decades of acquisitions, said it expected to generate financial capacity of 7 billion euros ($8.2 billion)after capital investment and dividends over the next four years.

"There is no other company in the sector with this level of cash firepower," analysts at Davy Stockbrokers said, saying CRH also set a target last month to raise 1.5 billion to 2.0 billion euros from the sale of assets.

Separately, CRH announced a strategic review of its Europe Distribution unit on Thursday to improve margins and returns and will also explore other strategic options for a business it said had a mixed performance in recent years.

That will likely lead to speculation of a possible sale of the unit that had sales of 4 billion euros last year, Davy said.

($1 = 0.8547 euros)

Reporting by Padraic Halpin, additional reporting by Rahul B in Bengaluru Editing by Mark Potter and Edmund Blair

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