Anglo American offloads Tarmac to joint venture

British mining group Anglo American took a step towards ridding itself of its unwanted Tarmac UK business on Friday by shifting it into a joint venture with French cement giant Lafarge.

Anglo has struggled to find a buyer for its Tarmac construction materials unit, which it has been seeking to sell for years.

The two companies said they will merge Tarmac UK with Lafarge’s own UK cement, aggregates, concrete and asphalt businesses in a 50:50 joint venture which last year had combined sales of £1.8bn and core earnings of £210m.

“While Anglo American’s objective remains to divest its interests in the joint venture over time, this transaction positions us well to maximise value,” said Anglo’s chief executive Cynthia Carroll in a statement.

The two companies did not disclose whether there was an agreement for either party to buy each other out, or whether there was a plan to eventually float the joint venture.

The joint venture will generate recurring synergies of at least £60m a year, the companies said.

Anglo said there would be virtually no job losses as a result of forming the joint venture.

The move came as Lafarge halved its dividend to reduce debt and Anglo’s results beat expectations.