Cemex set to divest certain UK assets to Breedon Group
UK-based Breedon Group has announced that it has entered into a conditional agreement with Cemex to acquire certain assets and operations in the UK for a total consideration of GBP178m, on a cash and debt free basis.
The assets encompass approximately 100 active operations, including 49 ready-mix plants, 28 aggregate quarries, 4 depots, 1 cement terminal, 14 asphalt plants and 4 concrete products operations. The operations are located across six divisions located in Scotland, Wales, north-east England, Norfolk, the East Midlands and Yorkshire. In 2018, the assets generated a revenue of GBP178m and an EBITDA of GBP23m.
"This is a unique opportunity to extend our national network through a single value-enhancing transaction, substantially increasing our footprint in several regions of Great Britain where we are currently under-represented and adding approximately 170Mt of mineral reserves and resources. It also delivers a step-change in the development of our national asphalt strategy," said Pat Ward, group chief executive.
Following the acquisition of the assets, Breedon is expected to have more than 1bnt of mineral reserves and resources and will employ over 3600 people. A number of greenfield sites are included as part of the acquisition and offer further expansion potential, according to a press release.
"In addition to the cost synergies we anticipate, we also expect the deal to be accretive to both earnings and free cashflow in the first full year, with a positive ongoing impact on the cash generation of the enlarged Group," said Mr Ward.
Completion is conditional on completion of a TUPE consultation process, which is expected to take place in the second quarter of 2020. Following the deal, Cemex UK will continue to operate integrated cement plants at South Ferriby (1Mta) and Rugby (1.8Mta), in addition to a grinding plant at Tilbury (1.2Mta).
