Business Round - Up

24 April 2008

BAA bid

Spanish contractor Ferrovial was expected to make a bid for UK airport operator BAA as CE went to press. The speculation followed an announcement issued by the contractor on 8 February stating that it was considering launching a bid for BAA, which operates seven UK airports and is valued at UK£ 15 billion (€ 21,9 billion).

It is believed that Ferrovial is preparing to make a bid as part of a consortium, which may include the Government of Singapore and Canadian trust fund manager Caisse de Depot et Placement du Quebec. No formal bid has yet been made to the BAA board but Ferrovial was expected to make an offer before 27 February, when the company is due to report its annual results.

Lafarge buyout

Lafarge, the world's largest cement maker, has offered US$ 3 billion (€ 2,53 billion) to acquire the 46,8% of Lafarge North American it does not already own. The company said it would offer shareholders US$ 75 (€ 63,2) per share, a +17% premium over the closing price on 3 February. According to Lafarge CEO, Bruno Lafont, the buyout, which the company is funding entirely through debt, is expected to have a positive impact on earnings per share.

JLG-Gradall

JLG Industries has sold its Gradall excavator business to Alamo Group, the US ground care and agricultural equipment manufacturer. The price was US$ 39,4 million (€ 32,8 million) in cash. Under the deal, announced on 3 February, Alamo has acquired the intellectual property for the Gradall range of excavators and also the 37400 m2 manufacturing facility in New Philadelphia, Ohio, US.

Rental exit?

Atlas Copco is exploring the sale of its North American equipment rental company RSC Equipment Rental following a strategic review of the business. The company says RSC is performing well, but that it does not fit with its other manufacturing activities. The business area reported revenues of US$ 1,55 billion (€ 1,3 billion) and operating profits of US$ 357 million (€ 296 million) in 2005.

Mowlem update

An extraordinary meeting of Molem shareholders held at the end of January voted to accept Carillion's takeover offer for the company. As reported last month, Carillion's bid values Mowlem at € 437 million.

KBR stake

Halliburton has announced plans to sell a minority stake in Kellogg, Brown & Root (KBR), its US$ 10,9 billion (€ 9,2 billion) per year construction and engineering subsidiary through an initial public offering (IPO) of shares. Halliburton has indicated it plans to sell 20% of KBR through the IPO, but has also said it may sell-off individual parts of the business in separate transactions. The company was previously thought to be considering divesting all of KBR, but recent rises in construction companies' share prices have made the IPO option more attractive.

Degussa to sell

Degussa's Management Board has confirmed it is in negotiations to sell its Construction Chemicals Division to chemical company BASF. The decision follows several unsolicited offers at the end of last year. In the first nine months of 2005, the division&s sales totaled € 1,5 billion and earnings, before interest and taxes, were € 174 million. In 2004 BASF had sales of € 37 billion.

Rail close

Heijmans has reached financial close in its acquisition of Heitkamp Rail. The € 65 million per year German company enjoys a strong position in the German and Dutch markets for high-speed railway maintenance and new build. See November 2005 edition for more details.

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