The board of Aggregate Industries has stated that is likely to recommend a 138 pence per share offer from Holcim, which would value the group at around GBP1800m (€2,550m). As Aggregate Industries does not have any cement manufacturing interests, downstream operations in the United States, where Aggregate Industries is an important Holcim customer, appears to be the main factor behind the bid approach. To date, Holcim’s downstream operations in North America have principally been concentrated on Canada. Aggregate Industries is active across six regions in the United States, representing total annual volumes of some 45m tonnes of aggregates and 6.5m m3 of ready-mixed concrete as well as substantial road surfacing operations.
In Europe, where Aggregate Industries is primarily active in Great Britain, with smaller interests in the Channel Islands and in Norway, the group has cement trading interests that include three import terminals in England and one in Scotland that currently handle around 0.3m tonnes per annum, but have the capacity to do more. Aggregate Industries is the fourth largest aggregates producer in Britain and its purchase by Holcim would leave Hanson the only one of the top five aggregates producers in Britain, that dominate a very concentrated market, not to be controlled by interests that have European cement capacity and HeidelbergCement’s Castle Cement, the only cement producer without downstream interests. The British operations of Aggregate Industries produce almost 70m tonnes of aggregates per annum and approximately 7.5m m3 of ready-mixed concrete
However, Cemex’ major step into Europe with the acquisition of RMC and the setting up of grinding facilities in Italy, and possibly elsewhere, may also have influenced Holcim to establish a British presence. If the deal goes through, Holcim is likely to eventually dispose of Aggregate Industries’ British-based decorative building products and concrete block operations that do not fit within Holcim’s current business structure.
Meanwhile...Citigroup Inc has just bought buying 190 million shares in Aggregate Industries PLC at 140 pence a share, according to traders familiar with the situation. The share purchases are believed to be on behalf of Swiss cement firm Holcim Ltd. However, a spokesman for Citigroup wasn’t immediately available to comment. Holcim also declined to comment.