Anglo American and Lafarge to create a leading UK construction materials company
18 February, 2011
Anglo American plc ("Anglo American") and Lafarge SA ("Lafarge") announce their agreement to combine their cement, aggregates, ready-mixed concrete, asphalt and contracting businesses in the United Kingdom, comprising Tarmac Limited ("Tarmac UK") and Lafarge Cement UK, Lafarge Aggregates and Concrete UK ("Lafarge UK").
The Transaction will form a 50:50 joint venture and will create a leading UK construction materials company, with a portfolio of high quality assets drawing on the complementary geographical distribution of operations and assets, the skills of two experienced management teams and a portfolio of well-known and innovative brands. The combined sales of these two businesses in 2010 amounted to £1.8 billion ($2.8 billion), with combined EBITDA of £210 million ($323 million).
This combination is expected to deliver substantial recurring synergies of at least £60 million ($96 million) per annum. Such synergies are expected to be generated by increased operational efficiencies, improved logistics, the introduction of value-added products across a wider geographic reach and other opportunities.
The joint venture’s complementary geographical and product portfolios are also expected to create a business optimally positioned to benefit from economic recovery.
Cynthia Carroll, Chief Executive of Anglo American, said: "We are excited to be bringing together two high quality and complementary UK businesses to create a compelling new industry proposition through which we expect to unlock significant value. While Anglo American’s objective remains to divest its interests in the joint venture over time, this transaction positions us well to maximise value."
Bruno Lafont, Chairman and Chief Executive of Lafarge, said: "This new leading construction materials company, built on the strengths and proud histories of two great teams, will create more value to customers, with an enhanced and larger offer of products and services. For Lafarge, this deal is cash neutral, is accretive to Lafarge shareholders and illustrates our strong commitment to the UK market."
The joint venture will operate with its own Board of Directors led by an independent Chairman and executive management teams drawn from both businesses.
Completion of the Transaction is conditional upon regulatory approvals. Both Lafarge UK and Tarmac UK operations will continue to operate independently until obtaining such approvals.
Notes to editors:
Tarmac UK and Lafarge UK – current operations
| Lafarge UK | Tarmac UK |
| Total employees 2,800 |
Total employees 4,500 (approximately) |
| Cement 5 plants with a network of 14 depots and terminals |
Cement and Lime 1 integrated plant and 3 depots |
| Aggregates 38 quarries, 19 depots, and 20 recycling sites |
Aggregates 118 quarries and 40 recycling plants |
| Ready-mixed concrete 100 fixed plant sites, 6 mobile plants |
Ready-mixed concrete 180 fixed sites |
| Asphalt 19 fixed plant sites with 3 mobile asphalt plants |
Asphalt 69 plants |
| + JVs (including 50% share in Scotash) | +JVs (including 50% share in Midlands Quarry Products with Heidelberg and other local JVs) |
| Gross Assets contributed £1.63 billion ($2.55 billion) |
Anglo American plc is one of the world’s largest mining companies, is headquartered in the UK and listed on the London and Johannesburg stock exchanges. Anglo American’s portfolio of mining businesses spans precious metals and minerals – in which it is a global leader in both platinum and diamonds; base metals – copper and nickel; and bulk commodities – iron ore, metallurgical coal and thermal coal. Anglo American is committed to the highest standards of safety and responsibility across all its businesses and geographies and to making a sustainable difference in the development of the communities around its operations. The company’s mining operations and extensive pipeline of growth projects are located in southern Africa, South America, Australia, North America and Asia. www.angloamerican.com
Lafarge is the world leader in building materials, with top-ranking positions in all of its businesses: Cement, Aggregates & Concrete and Gypsum. With 76,000 employees in 78 countries, Lafarge posted sales of Euros 16.2 billion in 2010. Lafarge was ranked 6th in the "Carbon Disclosure Project" and entered the global "Dow Jones Sustainability Index" in 2010 in recognition of its sustainable development actions. With the world’s leading building materials research facility, Lafarge places innovation at the heart of its priorities, working for sustainable construction and architectural creativity. Additional information is available on the web site at www.lafarge.com.