Anglo American/Lafarge sell-off begins

The next few months could well be an interesting one for the UK quarrying industry and one that could see big changes.

Rumour, as ever in these instances, is rife, but now that the final undertakings for the 722 Anglo American (868 Tarmac)/725 Lafarge construction materials joint venture plan have been published, the sales process is active. Announcing this, the Competition Commission, which looked into the joint venture, says that the sales will introduce a new competitor (or competitors) into the sector as the duo sell off assets.

As a reminder, the Commission reiterated its concern that the joint venture would increase the danger of coordination in the market for bulk cement and would reduce competition in local and national markets for other products including aggregates, asphalt and ready-mixed concrete (RMX), and in some instances the substantial lessening of competition could lead to prices that would be higher than might otherwise be the case.

The Competition Commission’s answer was that to proceed with its UK joint venture, Anglo American and Lafarge should implement certain divestitures, subject to safeguards. These include the Competition Commission being satisfied with the suitability of potential purchasers for all divestitures, and before it will give its final approval to the approved joint venture, Anglo American and Lafarge will be required to complete the divestiture of a cement plant and associated operations as well as certain RMX plants, and to obtain contractual commitments from one or more suitable purchasers to acquire Tarmac’s shareholding in the incorporated joint venture 4606 Midland Quarry Products Limited (MQP); two primary aggregates sites; a rail depot for the supply of aggregates and six specific RMX plants, if sold on a stand-alone basis.

So just what is to be sold?

Under various schedules, Lafarge has to sell cement and RMX and aggregates operations including its Hope cement works, one of the largest in the country, including the colocated quarries in County Derbyshire, the nearby Dowlow Quarry; rail-linked depots at Theale, West Berkshire, and Dewsbury in West Yorkshire, and nearly 70 RMX plants. Major aggregates and asphalt operations and RMX plants to be divested are its aggregates rail depot at Ashbury, Greater Manchester and RMX plants at Great Yarmouth, Northallerton and Selby, if sold on a stand-alone basis.

Anglo American’s Tarmac has to divest over 100 cement and RMX operations nationwide. Major aggregates and asphalt operations and RMX plants to be divested by Anglo American are the 50% interest in MQP and its quarries at Coxhoe, County Durham, and Holme Hall, County Yorkshire along with its asphalt plant at Cavenham, County Suffolk and RMX plants at Greenock (Scotland), Scunthorpe and Lincoln (County Lincolnshire), if sold on a stand-alone basis.

Let the negotiations begin, as if they haven’t already.