RMC pulls out of German sale option

RMC pulls out of German sale option
Published: 24 October 2003

As expected, European competition authorities have not looked too kindly upon a possible purchase by HeidelbergCement of RMC's German assets.

RMC has announced that talks with HeidelbergCement have been discontinued after "meetings with the European Commission and the German competition authorities". RMC's chairman Sir John Parker said: "It was not possible to structure the transaction to overcome the regulatory issues with certainty and within the timeframe acceptable to RMC."  The group said it remained "determined to resolve the problems facing the German business", which has been making "unacceptable losses". In the first half of the year alone it lost £31.4m.
The collapse of discussions sent RMC shares crashing 43 to 604 1/2 p as the group faced the prospect of resorting to its as yet unsuccessful German restructuring. Plants have been closed and jobs axed but the business continues to struggle.  Analysts had estimated that the unit, which accounts for almost a fifth of group sales and has net operating assets of £594m, could fetch between €700m and €800m ( £490m-£560m). RMC concluded that securing regulatory approval would have taken six months and been too costly. The talks lasted just three weeks.  The only way forward, should RMC still want to sell, would be if Holcim took the lead role in any negotiations for RMC's German assets.