The companies will form 50:50 joint venture which will be the UK’s largest construction materials with combined sales in 2010 of £1.8billion. The companies have said that the merger will create synergies of around £60million per year. Such synergies are expected to be generated by increased operational efficiencies, improved logistics, the introduction of value-added products across a wider geographic reach and other opportunities.
Anglo American chief executive Cynthia Carroll said, “We are excited to be bringing together two high quality and complementary UK businesses to create a compelling new industry proposition through which we expect to unlock significant value. While Anglo
American’s objective remains to divest its interests in the joint venture over time, this transaction positions us well to maximise value.”
Lafarge chairman and chief executive Bruno Lafont added, “This new leading construction materials company, built on the strengths and proud histories of two great teams, will create more value to customers, with an enhanced and larger offer of products and services. For Lafarge, this deal is cash neutral, is accretive to Lafarge shareholders and illustrates our strong commitment to the UK market.”
The deal has yet to be approved by the regulatory authorities and both operations will continue to trade separately until approval is granted.
