Hanson accepts Heidelberg offer

20 March 2008

Heidelberg Cement has agreed to buy Hanson for UK£ 8 billion (€11,7 billion) to create the world's second-largest construction materials producer. Hanson's Board has recommended the UK£ 11,00 (€16,18) per share offer to its shareholders. The deal is subject to regulatory approval in Canada, Europe and the US. Completion is expected in the third quarter of the year.

According to a joint statement, the combined company will be the world's fourth-largest cement producer, the second-largest ready mixer concrete producer and its biggest aggregates producer. Annual revenues are expected to be about € 15 billion and the company will employ more than 70000 people. Its main markets will be Europe (46% of revenues) and North America (40% of revenues).

Heidelberg chief executive, Bernd Scheifele, said in a statement, “It is consistent with our focus on strategic expansion into complementary geographies, across diversified products and customer markets. We believe that the combined business will be better able to respond to the evolving needs ... in the competitive and rapidly consolidating global building products industry.”

Heidelberg will fund the acquisition by a variety of means including a € 500 million share issue and a € 2 billion credit line with Deutsche Bank and The Royal Bank of Scotland. In addition, the company says it will issue bonds and divest non-core businesses.

The divestments may include Heidelberg's € 1,2 billion per year Maxit Group, which produces mortar and clay products. The company has engaged Goldman Sachs to examine the strategic options for the business. A divestment seems most likely, but Heidelberg cement has not ruled-out a separate stock market listing for the company.

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