Anglo shifts Tarmac to joint venture

Having struggled for more than three years to find a buyer for the unit, which it bought as part of the larger Tarmac group in 2000, Anglo said yesterday it had agreed to merge Tarmac UK with Lafarge’s own UK cement, aggregates, concrete and asphalt businesses in a 50:50 joint venture.

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

The deal comes as Ms Carroll seeks to slim down the diversified miner and cut its debt through a restructuring which analysts see as being designed to get it fit to fight any new renewed bid attempt by last year’s spurned suitor Xstrata.

When asked why Anglo chose a joint venture rather than pursuing an outright sale, Ms Carroll said market conditions in the UK were still “very challenging ... a sale of the business would have required waiting for this cycle to recover which could take some time.”

There was some disappointment in the market that Anglo had failed to sell the business outright.

“I don’t think the Tarmac joint venture was quite the exit everyone was hoping for,” said Tom Gidley-Kitchin, an analyst at brokerage Charles Stanley.

Analysts feel the Tarmac UK-Lafarge combination, which last year would have had sales of £1.8bn, could face competition concerns and regulators could force disposals.