The UK's largest publically quoted independent aggregates, concrete and asphalt producer Breedon Aggregates (BREE) has snapped up a ready-mixed concrete plant at the Clearwell quarry from Aggregate Industries. The quarry itself was bought from Aggregate Industries in April last year, and gaining the concrete plant and a fleet of ready-mix lorries will provide significant expansion opportunities for Breedon in the Gloucestershire and Monmouthshire area.
A further industry development may also increase the potential for acquisitions in the future, too. News of an agreed merger between the world's top two cement producers Lafarge and Holcim, which will have a combined annual turnover of €32bn (£28bn), could present a further opportunity to pick up more assets, as the enlarged group will almost certainly have to make disposals as part of the merger agreement. Analysts put these at somewhere around €650m to €975m, although the overlap within the UK is relatively small, with just 4 per cent of Holcim revenue generated in the UK and 7 per cent for Lafarge.
However, even though Holcim has no UK cement capacity, Lafarge has an estimated 36 per cent share, and the UK Competition Commission has already indicated its support for another significant producer in the UK. Nothing is certain though. There had been hopes of Breedon making a large purchase of assets that were put up for sale as a condition of the merger between Lafarge and Tarmac. However, the price was not quite right, and Breedon walked away.
And this time, there is almost certain to be competition from HeidelbergCement, which may wish to increase its exposure to the UK cement market, and also from Hope Construction Minerals, formed last year from the divestment assets of Lafarge and Tarmac.
