Lafarge and Anglo American agreed to sell UK assets for up to GBP285m, clearing the way for their building materials joint venture, according to Reuters. The sale, to Indian steel tycoon Lakshmi Mittal, was a condition set by Britain's Competition Commission to allow the two companies to combine their building materials activities in the country.
The divestments, which are conditional upon regulatory approval, comprise:
- a cement plant in Hope, Derbyshire, with a capacity of 1.4Mt, 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
- the sale of Tarmac's 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 consideration paid by Mittal Investments for the assets is GBP272m including up to GBP30m contingent on the performance of the underlying assets over the next three years. In addition, an estimated amount of GBP13m relating to working capital of the divested assets not transferring with the business will be released as funding to the newly formed joint venture between Lafarge and Tarmac.
Completion of the JV is expected in early 2013 and once established, it will create a new, leading UK construction materials company. Lafarge shares were down 0.6% in early trading.
