Breedon is disposing of the assets to Tillicoultry Quarries for £12.2m on a cash and debt free basis.
The 14 sites to be divested include 10 ready-mixed concrete plants and an asphalt plant and associated aggregates depot in England, and two quarries and a cement terminal in Scotland. The earnings of the assets being disposed of are not material to the Breedon Group.
Breedon says it is divesting the assets to address the CMA’s concerns that its purchase of certain assets from CEMEX UK gives rise to a realistic prospect of a substantial lessening of competition in certain areas. In August the CMA voiced concern that the completed merger could result in a substantial lessening of competition in relation to the supply of ready-mixed concrete, non-specialist aggregates or asphalt in 15 local markets across the UK.
Completion of the disposal of the 14 sites is subject to final confirmation by the CMA, following a public consultation inviting interested parties to submit their views, that it will accept the undertakings offered by Breedon in lieu of a Phase 2 reference and the approval of Tillicoultry Quarries as a purchaser for the assets.
The CMA intends shortly to launch the public consultation. Breedon says it expects to be in a position to complete the disposal before the year end after which it will integrate the remaining former CEMEX UK assets into its existing operations. It will then implement its plans for performance improvement to deliver value from the acquisition.
Breedon group chief executive Pat Ward said the company was very pleased with the outcome of this process and believes it is in the interests all stakeholders. "It allows Breedon to realise fair value for the assets disposed of which, together with the people employed in them, will be in good hands under new ownership of Tillicoultry Quarries,” he added.
