HeidelbergCement Seeks Buyers for Hanson U.K. Units
Cement group eyes concrete offers for Hanson businesses German company HeidelbergCement looks to consolidate by offloading its non-core parts
Parts of Hanson, the UK construction supplier, could be in different ownership by the end of the year as HeidelbergCement, the German cement maker, considers offloading non-core businesses.
Hanson was bought by HeidelbergCement, for UK£8bn in 2007 but the economic downturn has led the debt-laden German group into looking to shed assets. Hanson was listed on the FTSE 100 before the deal.
The majority owner of HeidelbergCement, was Adolf Merckle, but he committed suicide in January as the global financial crisis put pressure on his business empire. His son, Ludwig, now controls the business.
HeidelbergCement, is looking for buyers for Hanson’s building products businesses, but will keep its quarrying, cement and concrete arms. The building supplies businesses accounted for about 10 to 15 per cent of UK revenues, which are around UK£1.7bn.
David Weeks, a spokesman for Hanson, said a buyer had already approached the business about Thermalite, which manufactures aircrete building blocks. However, the suitor was turned away because of its valuation of the company.
HeidelbergCement, is initially looking to sell Formpave, the paving division, Structherm, a maker of cladding, Bath and Portland Stone, which provides for drystone walls, and Hanson’s pre-cast concrete business. The company is hopeful of buyers being found by the end of the year.
Marketing is just beginning for the sales, however, Mr Weeks stressed there is no rush and, given the state of construction markets, the process may take time.
"It’s a long-term strategy,’’ he said. "It may make more sense to hang on to them for another couple of years. The UK brick market has fallen by nearly 50 per cent.
"We’re at the very early stages. We don’t even have information memorandums drawn up for any of the businesses. We’re at the stage of sounding out contacts who’ve expressed interest or who might be interested.’’
Hanson is Britain’s biggest supplier of bricks and its businesses in that division - such as Cradley Special Brick, London Brick, Red Bank - face being sold at a later date.
Other businesses in the building supplies market have been badly affected by the downturn. CRH, the Irish group, launched a €1.2bn ( pounds 1bn) cash call to bolster its finances while UK-based insulation group SIG raised UK£340m as the dramatic slump in the housing market put banking covenants under pressure.
Wolseley, the plumbing and building supplies group, raised pounds 1bn. It has made thousands of staff redundant, and replaced Chip Hornsby as chief executive.
HeidelbergCement, has already disposed of assets worth €324m this year,
primarily in Indonesia and Israel.
The debts of the German company totalled almost €12bn at the end of 2008, according to accounts.
In June, however, it was able to secure a crucial refinancing agreement on €8.7bn of the debt as banks backed the still-profitable business.
Published under Cement News
