Displaying items by tag: Anglo American

US: Anglo American plc has reported 48% growth in its first half of 2014 pre-tax profit. Its underlying operating profit declined as revenues were hurt by lower commodity prices, despite increased production. Anglo American has also signed a binding agreement for the sale of its 50% stake in the Lafarge Tarmac Holdings Ltd joint venture in the UK for at least US$1.50bn.

During the first half of 2014, Anglo American's pre-tax profit climbed to US$2.95bn from US$1.99bn in the same period of 2013. Special items and re-measurements, including the attributable share of associates and joint ventures and after tax and non-controlling interests, amounted to a gain of US$180m, compared to a loss of US$847m in 2013. Underlying earnings were US$1.28bn, some 3% higher than the US$1.25bn that was reported in the same period of 2013.

Underlying operating profit fell by 10% to US$2.93bn from US$3.26bn in 2013. Lower realised prices of commodities resulted in a reduction of US$1bn in underlying operating profit. Group revenue, including associates and joint ventures, declined slightly to US$16.1bn from US$16.2bn in 2013, which was attributed to a drop in many commodity prices, continuing weak global economic growth and increases in seaborne commodity supply.

"As we look at the global economic outlook, uncertainty is likely to persist for the balance of 2014, though there are some encouraging signs that activity is strengthening in our key markets," said Anglo American's CEO Mark Cutifani said. "Over the long term, we expect new supply to be constrained and to see tightening market fundamentals and a recovery in price performance."

UK: Anglo American has announced that it plans to sell its equity in its joint venture project with Lafarge UK. Anglo American plans to use the proceeds of the sale to pay off debt.

Once it owns the entire firm, Lafarge plans to sell it to help it gain approval from competition regulators for its merger with Holcim. Lafarge and Holcim need to shed around Euro5bn in assets to persuade regulators to back the merger. Lafarge and Holcim's merger is expected to be completed in the first half of 2015.

"The sale will be subject to a number of conditions, including the completion of the Lafarge / Holcim merger, the divestment of Lafarge Tarmac being accepted as a suitable remedy, and approval of this sale transaction by the necessary regulators," said Anglo American.

UK: UK-based Anglo American plc said that it has completed the sale of its building products unit, Tarmac Building Products Ltd (TBP), to Lafarge Tarmac, without providing financial details.

Lafarge Tarmac is a 50/50 joint venture between Lafarge and Anglo American, formed through the merger of Lafarge's business in the UK and the local construction materials and services businesses of Anglo American.

UK: Anglo American announced that it has reached an agreement to sell Tarmac Building Products Limited (TBP) to Lafarge Tarmac Holdings Limited.

Lafarge Tarmac is the 50:50 joint venture of Lafarge's and Anglo American's construction materials and services businesses in the UK. The terms of the transaction are confidential and the transaction is subject to regulatory approvals. The transaction is expected to close in the first half of 2014.

Both TBP and Lafarge Tarmac operations will continue to operate independently until such approvals are obtained.

UK: Lafarge and Anglo American have announced the completion of a 50:50 venture which combines their cement, aggregates, ready-mix concrete, asphalt and asphalt surfacing, maintenance services and waste service businesses in the UK. The joint venture will be known as Lafarge Tarmac and began trading today. The Lafarge Tarmac combination is expected to generate savings of Euro74m through improved operational, logistical and purchasing efficiencies and the introduction of value-added products across a wider geographic area.



Completion of the Lafarge Tarmac joint venture follows final clearance from the UK Competition Commission, based on the completed sale of a portfolio of Tarmac and Lafarge construction materials operations in the UK, which also occurred on 7 January 2013. The agreed sale of Tarmac's 50% ownership interest in Midland Quarry Products is subject to a right of pre-emption in favour of Hanson Quarry Products Europe Limited. As a result of this the completion of this transaction is pending.



"We have successfully united two high quality and complementary UK businesses to create the leading UK construction materials company with high quality assets, two experienced management teams and a portfolio of well-recognised, innovative brands," said Cynthia Carroll, Chief Executive of Anglo American.



"The closing of this transaction and the creation of a new British construction materials champion reinforce Lafarge's ongoing commitment to the UK market and its efforts to continuously improve its offering to customers, as well as playing a full role in developing the infrastructure needed for a growing economy," said Bruno Lafont, Chairman & Chief Executive of Lafarge.

UK: Lafarge SA and Anglo American plc have announced they have agreed to sell a portfolio of Tarmac and Lafarge construction materials operations in the UK and Tarmac's 50% ownership interest in Midland Quarry Products Limited (MQP) to Mittal Investments, the private investment vehicle of the Lakshmi N Mittal family.

The consideration paid by Mittal Investments for the assets is Euro338m including up to Euro37m based on the performance of the underlying assets over the next three years. In addition, an estimated amount of Euro16m relating to working capital of the divested assets not transferring with the business will be released as funding to the newly formed joint venture between Lafarge and Tarmac.

The divestments, which are conditional upon regulatory approval, comprise a cement plant in Hope, Derbyshire, with a capacity of 1.4Mt/yr and related depots; a network of 172 ready mix concrete plants; five aggregates quarries, two asphalt plants, one marine aggregates wharf and one rail-linked aggregates depot; the sale of Tarmac's 50% ownership interest in MQP, which is also subject to regulatory approval, and a right of pre-emption in favour of Hanson Quarry Products Europe Limited.

The sale of these assets is the principal condition to receiving final clearance from the Competition Commission for the formation of a 50:50 joint venture, which will combine Tarmac's and Lafarge's cement, aggregates, ready-mixed concrete, asphalt and asphalt surfacing and maintenance services and waste services businesses in the United Kingdom in a joint venture (JV).

Completion of the JV is expected in early 2013 and, once established, the companies say that it will create a new, leading UK construction materials company, with a portfolio of high quality assets, drawing on the complementary geographical distribution of operations, the skills of two experienced management teams and a portfolio of well-recognised, innovative brands.

Lafarge said that a further announcement would be made in due course.

UK: Lafarge's chief executive Bruno Lafont has said that the joint venture between miner Anglo American and cement maker Lafarge in the UK is likely to begin selling a series of assets as required by regulators by the end of June 2012.

The UK Competition Commission said in May 2012 that the companies had to sell 'an extensive package of operations' including one of the UK's largest cement plants, the Hope plant in Derbyshire, for the planned joint venture to win approval.

"It's a process that should start at the end of the month of June when we have completed the process of authorisation and consultation with the antitrust authorities," Bruno Lafont announced.

Both companies said in May 2012 that they were confident the conditions for the joint venture would be met, prompting speculation that they might have buyers for the assets lined up, despite government austerity plans that are likely to limit infrastructure spending.

UK: The UK Competition Commission (CC) has announced that Anglo American plc (via UK subsidiary Tarmac) and Lafarge will have to sell a significant portfolio of operations, paving the way for entry by a new competitor into the UK cement market, before their proposed construction materials joint venture can go ahead.

In February 2012, the CC provisionally ruled that the proposed joint venture between Anglo American and Lafarge could damage competition in certain markets for construction materials. In its final report, the CC has reiterated its concern that the joint venture would increase the danger of coordination in the market for bulk cement and would reduce competition in local and national markets for other products including aggregates, asphalt and ready-mix concrete.

Anglo American and Lafarge will now be required to sell an extensive package of operations including:

• Lafarge's cement plant in Hope, Derbyshire as well as the nearby Dowlow quarry and three linked rail depots.

• A substantial network of readymix concrete plants, representing well over half of the proposed joint venture's readymix concrete capacity.

• Six aggregate quarries as well as Tarmac's share of two quarries owned through its Midlands Quarry Products joint venture with Hanson and one rail

depot.

• Two asphalt plants as well as Tarmac's share of five plants owned through Midlands Quarry Products joint venture.

The CC further stated that the sale would have to be completed before the joint venture would be allowed to proceed.

UK: The UK Competition Commission has decided provisionally that the proposed joint venture between Anglo American plc and Lafarge SA in the UK could damage competition in certain markets for construction materials.

In February 2011 Anglo American, through its UK subsidiary Tarmac Ltd, and Lafarge announced a proposal to establish a 50:50 joint venture, to which each of them would contribute the bulk of their construction materials businesses in the UK. The two parties' main overlapping activities in relation to the joint venture are in the production and supply of cement, aggregates, asphalt and ready-mixed concrete. The Office of Fair Trading referred the case to the Competition Commission on 2 September 2011.

Now the Competition Commission has reported that the joint venture could lead to a substantial lessening of competition in the markets for the supply of bulk cement, rail ballast, high-purity limestone (when used for flue-gas desulphurisation), primary aggregates for construction applications in 23 local markets, asphalt in two local markets and ready-mixed concrete in seven local markets.

"We have a number of concerns about this joint venture," said Roger Witcomb, chairman of the Anglo/Lafarge Inquiry Group. "In bulk cement there are currently only four UK producers and there is evidence that the market is not as competitive as it could be. Prices and profit margins haven't been affected in the way we would have expected following the big falls in the demand for cement in the past few years."

Although the Commission has not reached a view on whether or not there has been coordination in the bulk cement market, Witcomb said there were concerns that the proposed tie-up would increase the susceptibility of this market to co-ordination. "Some of the reasons for this arise from the proposed combination of the cement businesses and some from the increased vertical integration that would result from the combination of their ready-mixed concrete businesses," he said. "Lafarge currently have a relatively small ready-mixed concrete business, while Tarmac have a relatively large one."

Witcomb continued, "We are now consulting on the possible actions we could take in response to the reductions in competition we have found, bearing in mind the close links that exist between the different product markets."

As well as the summary of provisional findings, the Competition Commission has published a notice of possible remedies, outlining ways that the potential anti-competitive effects of the joint venture could be prevented. It will issue a final report no later than 1 May 2012.

UK: The Office of Fair Trading (OFT) has referred the proposed UK construction materials joint venture between Anglo American plc and Lafarge SA to the Competition Commission for further investigation. The companies had proposed the establishment of a 50:50 joint venture to which each of them would contribute the bulk of their construction materials businesses in the UK.

The OFT concluded that competition concerns arise in a number of markets including: overlaps in the supply of aggregates, asphalt and ready-mixed concrete in a large number of local areas (as well as particular types of aggregates at regional and national level); an overlap in the supply of bulk grey cement at a regional and/or national level, as well as, separately, an increased prospect of coordination in the supply of bulk grey cement; and a concern that the joint venture could foreclose independent ready-mix concrete suppliers by making it substantially more difficult for them to source bulk grey cement at competitive prices.

Ali Nikpay, OFT Senior Director, said - "The proposed joint venture would bring together Tarmac's and Lafarge's construction material assets in the UK. This represents a significant structural change in this sector and raises serious competition issues in several markets which need to be considered in detail by the Competition Commission. Although the parties did offer to divest a variety of assets in order to try to resolve the issues identified, we are not confident that the package proposed would clearly remove our concerns in all areas."

Anglo American and Lafarge provided a significant quantity of information and analysis to the OFT to inform its review. The OFT also received information from around 300 customers and competitors of the two parties as part of its merger investigation. The Competition Commission is expected to report by 16 February 2012. This announcement follows the OFT's decision in August 2011 to refer the UK cement, ready-mix concrete and aggregates sectors to the Competition Commission.