Spohn set to buy HeidelbergCement for €6.5bn

Spohn Cement GmbH made a surprise offer to take over HeidelbergCement AG, Germany’s largest cement maker, offering €60 a share in a deal that would be valued at about €6.5bn.

Spohn, based in Norderfriedrichskoog in the German state of Schleswig-Holstein, said in a statement Friday the offer to HeidelbergCement shareholders was conditional upon approval from Germany’s cartel office.

A spokeswoman for HeidelbergCement confirmed the offer yesterday, but declined to comment further other than to say HeidelbergCement will await examination of the offer by German securities watchdog BaFin. BaFin couldn’t be reached to comment yesterday.

Spohn Cement is closely linked to Adolf Merckle, who directly holds some 12.8 per cent of HeidelbergCement. Analysts said the Merckle group probably controls substantially more of HeidelbergCement through investment funds. HeidelbergCement Chief Executive Bernd Scheifele, who took over in January, and finance chief Lorenz Naeger are thought to be trusted allies. Both managers had previously worked at Phoenix Pharmahandel, another of Mr. Merckle’s companies.

HeidelbergCement shares closed at €50.25 on Friday, up two per cent, meaning Spohn’s offer constitutes about a 20 per cent premium.

The company recorded a €366m net loss in 2004, its first since World War II. It also posted an operating loss of €35m in the first quarter, slightly wider compared with the prior year, as prolonged wintry weather in Europe, its biggest market, meant less construction work there, but the company’s sales growth abroad was strong.