Tarmac set for new lease of life after £5bn deal is concluded
ONE of the most iconic names in the Midlands construction sector is set to begin a new phase of its existence following the completion of a complex £5bn transaction.
The deal which sees the rebirth of Tarmac comes after Irish building materials group CRH tied up the acquisition of the Tarmac business, along with that of Blue Circle, from aggregates group Lafarge and mining conglomerate Anglo American.
Tarmac and Blue Circle have now come together to form Tarmac, which CRH aims to grow into the UK leader in building materials and sustainable construction solutions.
Drawing on the respective strengths of both Tarmac and Blue Circle, the newly combined business is now the market leader in aggregates, asphalt, contracting services, lime and powders and is a leading player nationwide in cement, concrete and other building products.
The company’s position in cement is also enhanced by access to significant import capacity in addition to its existing three UK manufacturing plants.
Tarmac’s new branding combines the heritage and innovation associated with the Tarmac name and the unique identity of the Blue Circle logo.
The go-ahead for the new move has been a protracted affair. Even after Anglo American agreed to dispose of its 50% stake in Lafarge-Tarmac for $1.6bn the deal was delayed for 12 months because it was dependent on the completion of the €41bn merger between Lafarge and Holcim, which completed last month.
The sale to LafargeHolcim ended Anglo American’s involvement with Tarmac, which it originally acquired in 1999, save for an operation in the Middle East.
Cyrille Ragoucy, the man appointed as Tarmac CEO, said: “This is an exciting evolution for our business. With our new owner CRH in place to support the ongoing development and delivery of our strategic vision, we’re in an exceptionally strong position to deliver our growth ambitions and continue creating value for our customers, our shareholders and our employees.”
The new business boasts more than 6,600 employees across more than 330 sites, and CRH said that the operation was underpinned by a major investment in technology and logistics capacity. This will enable the business to have the capability, expertise and scale to support the delivery of major infrastructure projects, as well as supplying the retail and trade markets with a range of high-end DIY and bagged solutions.
Tarmac has confirmed that there will be no change to its relationships with customers, suppliers and other stakeholders.
The company, which will continue to be based at Solihull, will also maintain the supply of the same market-leading range of products and solutions.
On the wider deal, CRH chief executive, Albert Manifold, said: “Today we extend a warm welcome to 15,000 new colleagues joining CRH. With their expertise and talent on board, combined with the strength of our existing employee base, CRH is a step closer to achieving our aim of becoming the world’s leading building materials company.
“The businesses we are acquiring, which represent an excellent geographic fit with CRH’s existing operations, are all strong performers in their respective areas. The integration of these high quality assets, which we have acquired at an attractive valuation and at the right point of the cycle, will strengthen our presence in a number of key markets as well as providing new platforms for strategic growth. The additional scale will help us to improve efficiency, speed up innovation and provide an even better service to our customers.”
