Heidelberg deal ends Hanson speculation

Germany's HeidelbergCement has ended takeover speculation about the UK's Hanson Group by making an £11 (16.18) per share bid for the company on 15 May, valuing it at £8billion (11.8billion). Rumours about the acquisition plan broke in early May and Hanson's share

"Hanson's business is a good strategic fit for Heidelberg - synergy exists between the two companies without significant overlap," a spokesman for Hanson told ABE. "Heidelberg's core business is cement but acquisition of Hanson will give the group better control of the market with access to its own limestone, sand and gravel resources."

According to Hanson's spokesman, information about the takeover will be sent out to shareholders later this month and it is expected that the deal will be completed in the third quarter of this year, possibly in September. "There is still the possibility for a higher bid to be made or for the shareholders to reject the offer," he said. "But Heidelberg has already secured around 30% of Hanson shares, so it is unlikely that the deal will not now go through." Heidelberg has created 4.4 million new shares, each valued at 114 to raise 500million in cash, which the company has said will be used to partly refinance the

takeover. It is thought that Heidelberg's majority shareholder Adolf Merckle will buy most of the new share offering.

Hanson is currently one of the biggest suppliers of heavy building materials with revenues of £4.1billion (6billion) in 2006 and 26,000 employees. The company is split into two divisions - aggregates and building products - with operations in North America, the UK, Australia, Continental Europe and Asia Pacific.

Heidelberg holds a market leading position in cement across Europe and Central Asia with sales of 9billion last year. Completion of the deal will create one of the world's largest companies in the industry, second only to Cemex, with combined revenues of 15billion and 70,000 employees worldwide.

Hanson was once the UK's largest industrial conglomerate and was built up by James Hanson, later to become Lord Hanson, who from the 1960s helped transform a fertilizer maker into a group with interests ranging from cigarettes and chemicals to housing and hot dogs. The aggregates side of the company demerged in 1997 to create the business as it exists today.

The bid by Heidelberg ends several years of speculation about the takeover of Hanson, which was viewed to be one of the UK's last big aggregate companies without a significant problem with asbestos claim. Until Cemex made its bid for Rinker, Hanson was thought to be an acquisition target for the company. There were also suggestions that Rinker and Hanson could merge. Cemex said, after agreeing a deal with Rinker in April, that it would not be in a position to make any other major acquisitions for another two years.

Published in: Aggregates Business Europe June July 2007 Vol. 1 Issue 2