As part of its portfolio optimisation and margin improvement programme in its North American business, HeidelbergCement has signed an agreement to sell its business activities in the US West region to the US based company Martin Marietta Materials, Inc. The sale price is US$2.3bn in cash.
"The sale of our US West region activities is a major step in our portfolio optimization as part of our 'Beyond 2020' strategy," said Dr Dominik von Achten, chairman of the Managing Board of HeidelbergCement. "We are simplifying our portfolio in North America and prioritising on the strongest market positions. Our engagement for the North American market is stronger than ever." Chris Ward, president and CEO of Lehigh Hanson Inc, reiterated HeidelbergCement’s high commitment for future growth in North America by saying: "We will accelerate the build-out of our positions in the four key regions Canada, Midwest, Northeast and South through selected bolt-on acquitisions and capacity expansion projects in the future."
The transaction comprises the sale of Lehigh Hanson’s business activities in cement, aggregates, ready-mixed concrete, and asphalt in the US West region (California, Arizona, Oregon, and Nevada), except for the Permanente cement plant and quarry. The sale includes two cement production plants with related distribution terminals, 17 active aggregates sites, and several downstream operations.
Chris Ward said: "We appreciate the dedication, commitment and hard work of our West Region employees and are thankful for their contribution to our success over the years. We wish them well under the new ownership."
Ward Nye, chairman, president and CEO of Martin Marietta, stated, "We continue to successfully execute on our strategic initiatives to enhance our footprint and responsibly expand our business. Lehigh's West Region has leading positions in some of the nation’s most attractive markets, providing Martin Marietta with access to new geographies for continued industry-leading growth. With this acquisition, our company will be well-positioned to capitalice on long-term demand drivers from increased state infrastructure investment in California and Arizona as well as continued private-sector growth across these regions.
"We are confident in our ability to quickly realise the benefits of this transaction following the same proven approach we took with our acquisitions of TXI and Bluegrass. Those purchases delivered significant value creation as will the addition of the Lehigh West Region as Martin Marietta SOARs to a Sustainable Future."
Closing of the transaction is expected in the 2H21 pending regulatory approvals. Lehigh Hanson will maintain ownership and management of these assets until that time.
