Anglo American and Lafarge announce the sale of a portfolio of Tarmac and Lafarge construction materials operations in the UK to Mittal Investments generating cash of up to £285 million
16 November, 2012
Lafarge SA and Anglo American plc announce that they have agreed to sell a portfolio of Tarmac and Lafarge construction materials operations in the UK and Tarmac’s 50% ownership interest in Midland Quarry Products Limited (MQP) to Mittal Investments, the private investment vehicle of the Lakshmi N. Mittal family.
The consideration paid by Mittal Investments for the assets is £272 million including up to £30 million contingent on the performance of the underlying assets over the next three years. In addition, an estimated amount of £13 million, which relates to working capital of the divested assets not transferring with the business, will be released as funding to the 50:50 joint venture between Lafarge and Tarmac.
The divestments, which are conditional upon regulatory approval, comprise:
- a cement plant in Hope, Derbyshire, with a capacity of 1.4 million tonnes, and related depots;
- a network of 172 ready mix concrete plants;
- five aggregates quarries, two asphalt plants, one marine aggregates wharf and one rail-linked aggregates depot; and
- the sale of Tarmac 50% ownership interest in MQP, which is also subject to regulatory approval and a right of pre-emption in favour of Hanson Quarry Products Europe Limited.
The sale of these assets is the principal condition to receiving final clearance from the Competition Commission for the formation of a 50:50 joint venture, which will combine Tarmac’s and Lafarge’s cement, aggregates, ready-mixed concrete, asphalt and asphalt surfacing and maintenance services, and waste services businesses in the United Kingdom (the “JV”).
Completion of the JV is expected in early 2013 and once established, it will create a new, leading UK construction materials company, with a portfolio of high quality assets, drawing on the complementary geographical distribution of operations, the skills of two experienced management teams, and a portfolio of well-recognised, innovative brands.
The transaction announced today is a major step towards finalising this JV. A further announcement will be made in due course.