The chief executive of Anglo American, Cynthia Carroll, is considering a UK£3bn auction of Tarmac, its building-materials division, this summer.
It is thought that Lafarge has already expressed an interest in buying the business. CRH is also watching events closely as are a number of private-equity groups.
But before Tarmac is put up for sale, Carroll is keen to push through cost cuts at the subsidiary to ensure it fetches the maximum price. Anglo has admitted that it is evaluating Tarmac’s future within its global mining business. It is seen as non-core.
Analysts say the sale is just one of a number of strategic decisions that will be made by Carroll, who has recently taken over as chief executive. Last week she impressed the City with her first detailed briefing. Those who were present said she was keen to shed the group’s conservative image and appeared willing to consider large deals and raise the company’s risk profile.
The decision-making process is being speeded up and central overheads are being cut. Analysts said that in taking this more aggressive approach Anglo is no longer being seen as a passive player in the industry’s consolidation. As a result the company is now viewed as a consolidator rather than a target for rivals such as BHP Billiton, Rio Tinto or Xstrata.
Tarmac is a profitable business generating annual earnings before interest, tax, depreciation and amortisation of $600m (UK£300m). The high price recently offered for Hanson, a rival aggregates group, highlighted the appetite for these types of companies.
Anglo bought Tarmac just over seven years ago in a deal that valued the equity at just over UK£1bn. The division has operations across Europe.
Lafarge is seen as a natural buyer. It is also no stranger to buying British companies, having already snapped up Blue Circle and Redland. It had been seen as a buyer for Hanson, but never made a bid and instead watched HeidelbergCement, launch a knock-out UK£ 8bn offer last month. This created the world’s second-largest company in construction materials.
[Source: Sunday Times]