Lafarge to merge with Tarmac

UK building materials businesses Tarmac and Lafarge Cement UK are merging to form a new enterprise.

Lafarge to merge with Tarmac

Tarmac’s parent Anglo American and Lafarge’s French parent Lafarge SA will combine Lafarge Cement UK, Lafarge Aggregates and Concrete UK with Tarmac Quarry Materials. Estimated savings are in the region of £60m.

The businesses had combined sales of £1.8 billion last year 2010 and run 280 ready-mixed concrete sites, 156 quarries, 19 depots and 60 recycling sites with 7,300 UK employees

Lafarge UK and Tarmac UK are to continue to operate separately until the regulatory approvals have been gained and a new name for the joint venture has been agreed.

Anglo American chief executive Cynthia Carroll said: “While Anglo American’s objective remains to divest its interests in the joint venture over time, this transaction positions us well to maximise value.”

“For Lafarge, this deal is cash neutral, is accretive to Lafarge shareholders, and illustrates our strong commitment to the UK market,” said Lafarge chairman and chief executive Bruno Lafont.

The Office of Fair Trading is already investigating the aggregates sector in the UK because of concerns that the domination of the five leading players – which includes Tarmac and Lafarge – is causing “high barriers to entry”.

Anglo has been trying to sell Tarmac since 2007.

About Fiona Russell-Horne

Group Managing Editor across the BMJ portfolio.

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