TWO major construction materials firms moved closer to a tie-up yesterday with the £272m sale of plants and quarries to Britain’s richest man.
Tarmac owner Anglo American and France’s Lafarge were told to sell off the assets to address competition concerns over a proposed merger of their UK operations.
Today’s deal with steel tycoon Lakshmi Mittal’s investment vehicle includes one of the UK’s largest cement plants, in Hope, Derbyshire.
The Competition Commission said in May that the two groups must pave the way for a new competitor into the UK cement market to ensure the joint venture did not damage competition.
It said at the time there were only four UK producers of bulk cement and there was evidence competition had not been as effective as it could be.
The assets it earmarked, and which are in yesterday’s deal, include operations supporting Lafarge’s Hope facility and more than half the joint venture’s ready-mix concrete capacity.
A nearby quarry and three linked rail depots, along with six aggregate quarries and two asphalt plants will also be sold to Mittal Investments.
Lafarge and Anglo American said they expect the joint venture to be approved early next year.
France’s Lafarge entered the UK market in 1987 before acquiring Redland in 1997 and Blue Circle in 2001. It employs 68,000 people worldwide.
Tarmac is the UK’s largest quarrying company and has been involved in some of the UK’s biggest construction projects, including Wembley Stadium, Emirates Stadium, the M1 widening, M25 resurfacing and the London Olympics.
Mittal Investments will pay £272m, including up to £30m depending on the performance of the assets over the next three years.
It plans to become a “new and strong competitor”, with the assets creating a yet to be named large-scale producer employing about 800 people across 200 locations.
In a statement, it said: “We were attracted to these assets as we have confidence in the future growth of the UK economy and, more specifically, the construction sector.
“As the UK moves out of recession, we expect to see a recovery in construction activity that the new company, as a significant and competitive player in this important industry, will be well positioned to participate in.”