Adelaide Brighton sees potential in US$2bn acquisition

Adelaide Brighton sees potential in US$2bn acquisition
Published: 22 June 2016


Adelaide Brighton Group says it has carried out detailed work on a potential US$2bn acquisition of the Australia and New Zealand operations of Lafarge­Holcim, including a plan to address competition issues.

Martin Brydon, Adelaide Brighton's  chief executive, confirmed that Adelaide Brighton had been working with its longstanding takeover defence adviser Credit Suisse and Blackpeak Capital.

Mr Brydon said that while LafargeHolcim had still given no indication it was selling the Australian assets and that the deal was a "plan B" for Adelaide Brighton, the company had done a lot of work on the competition issues in the transaction.

"If they did come on the market, Adelaide Brighton is the natural owner for their aggregates and concrete businesses, which are substantial," he said.

"We have done a lot of work on this. We have plotted our business down to the local level, as we have for LafargeHolcim. We have overlaid them. We have 10 quarries, they have about 60. There is no overlap.

"We have around 50 concrete plants. They have around 200. Again there is no overlap. If there are pinch points we might need to divest or shut down just five concrete plants."

The biggest competition hurdle in the deal would be acquiring Holcim's 50 per cent stake in the Cement Australia joint venture, which is jointly owned by Holcim and Hanson.

"If you come up with a solution for that, there should be no problem,’" Mr Brydon said.

"We have done a lot of work internally with advisers on what that would mean and what we would need to do ... in the unlikely case that it comes on the market," he added.

Mr Brydon said "plan A"for the company was to look at smaller acquisitions and greenfields opportunities.