Tarmac and Lafarge merger plans set back by Breedon pullout
THE proposed merger between Wolverhampton building industry giant Tarmac can and Solihull rival Lafarge has been derailed after Breedon Aggregates pulled out of the bidding for the firms’ assets.
Back in May the Competition Commission ruled that Tarmac could merge with Lafarge – but only if certain assets are sold.
A plan to create a 50:50 joint venture to combine Tarmac and Lafarge’s UK aggregates, asphalt, ready-mix concrete, cement, road contracting services and waste services had been with the commission since February.
But now East Midlands-based concrete and cement business Breedon Aggregates has thrown a spanner in the works of the merger by announcing it was backing away from a plan to buy some of the assets that must be divested by the West Midlands firms.
In a statement to the Stock Exchange, Breedon said: “Breedon Aggregates announced on 1st May 2012 its interest in the assets being made available through the divestiture programme being conducted by Lafarge and Tarmac, as a precondition of their proposed construction materials joint venture.
“Over the past two months Breedon Aggregates has conducted a thorough review of the assets being made available in the disposal packages. Earlier this month the group submitted conditional offers to the sellers’ advisers for a number of the assets.
“In the event, the group has been unable to meet the value expectations of the sellers in respect of the majority of assets by number and value and has therefore withdrawn from the bidding process for these assets.”
Breedon did go on to say, however, that it is still in discussion regarding the possible acquisition of certain of the other assets and will make a further announcement on this in due course.
The Competition Commission said Tarmac and Lafarge would have to sell an extensive package of operations including a cement plant in Hope, Derbyshire, as well as the nearby Dowlow quarry and three linked rail depots.
Six aggregate quarries as well as Tarmac’s share of two quarries owned through its Midlands Quarry Products (MQP) joint venture with Hanson would also have to be sold as well as two asphalt plants and Tarmac’s share of five plants owned through MQP.
