Anglo, which held its AGM on April 22, bought Tarmac for GBP1.2bn in 1999, and recently earmarked the business for divestment as part of an aggressive cost-cutting programme initiated in the wake of last year’s failed merger with rival Xstrata. No buyer was found and the sale was put on hold by Anglo due to the global recession. The company had been looking to sell Tarmac in its entirety, but now seems willing to sell it piecemeal instead. In February of this year Anglo sold some of Tarmac’s European operations for a combined total of GBP260m – no doubt prompting this recent bid from Marwyn – but it is thought that the company is reluctant to sell the rest of Tarmac at a discount. A spokesperson for Anglo American was reported as saying: “We will sell Tarmac at the appropriate time and in an appropriate manner that maximises value for our shareholders.” Ultimately, it will depend on Anglo’s commitment to divest its non-core assets in line with its current business strategy to streamline its industrial division. Analysts currently value Tarmac at up to US$4-6bn. In 2009, the company generated a turnover of US$2870m (€2106m), a YoY reduction of 34.8%, and an EBITDA 35.9% lower at US$313m (€230m). Like-for-like profits were down by 71% in Great Britain on the back of volume reductions in the region of 24%. A significant portion of quarrying and downstream capacity in ready-mixed concrete and concrete products has been mothballed over the past two years in response to the fall-off in demand.
Holcim, which controls no cement manufacturing in the UK and is a previous buyer of cement from the Buxton works, is also a logical buyer, and indeed acquired Tarmac Iberia SAU, the leading supplier of ready-mix concrete and aggregates, from Anglo for €148m in 2008. However, the cement major’s strategy to diversify in emerging markets combined with the depressed state of the UK cement market and competition for the asset from Marwyn may make such a move less appealing. In the UK, Tarmac owns Buxton Lime and Cement, which operates a 0.8Mta dry-process cement plant in Tunstead, Derbyshire.
