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Breedon Group PLC (BREE)

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Monday 02 July, 2018

Breedon Group PLC

BREEDON COMPLETES ASSET SWAP WITH TARMAC

RNS Number : 1608T
Breedon Group PLC
02 July 2018
 

2 July 2018                                                                                         

Breedon Group plc

 

Breedon completes ASSET SWAP with Tarmac

 

Further to the announcements made on 13 December 2017 and 26 April 2018, Breedon Group is pleased to announce that it has completed an asset swap with Tarmac which secures 25 million tonnes of additional mineral reserves and around 50,000 tonnes of additional annual asphalt capacity in four key UK locations.

 

The Group has acquired from Tarmac three quarries near Inverness, Penrith and Wrexham, together with a quarry and asphalt plant near Porthamadog, in exchange for 23 of its ready-mixed concrete plants and a payment to Tarmac of £6.1 million in cash. 

 

Commenting on today's announcement Pat Ward, Breedon's Group Chief Executive, said:

 

"This is an excellent, margin-enhancing deal for us and fully in line with our strategy of strengthening our asset base and improving the quality of our earnings.

 

"It gives us a significant quantity of high-quality mineral reserves, including a scarce source of high PSV stone and a new asphalt plant in West Wales capable of producing up to 50,000 tonnes of material a year.  It also gives us a significant new source of hardstone in the heartland of our Scottish business, at Daviot Quarry near Inverness where we already have an asphalt plant.

 

"At the same time it streamlines our concrete network and enables us to release value by relinquishing peripheral plants which we couldn't supply internally and which in many cases were on short-term leases.

 

"This means we have become much less dependent on third-party aggregates.  We can now supply more of our concrete and asphalt plants with our own minerals, with the secure backing of nearly 900 million tonnes of reserves and resources across the UK and Ireland.

 

"It's also a great example of how we can work with our larger peers - in this case Tarmac, a subsidiary of one of the world's most successful global building materials companies - to benefit customers and other stakeholders on both sides of the deal."

 

Following today's deal, Breedon operates more than 70 quarries, 40 asphalt plants and around 180 ready-mixed concrete plants, extending from the north of Scotland to the west of Ireland and the south-east of England.

 

Completion of this transaction follows the conclusion of investigations by the Competition and Markets Authority, which has accepted remedies proposed by Tarmac - and accepted by Breedon - in relation to any potential competition concerns arising from it.

 

- ends -

Notes to editors

 

Breedon Group plc is a leading construction materials group in the UK and Ireland. It currently operates two cement plants, more than 70 quarries, 40 asphalt plants, around 180 ready-mixed concrete and mortar plants, nine concrete and clay products plants, four contract surfacing businesses, six import/export terminals and two slate production facilities.

The group employs nearly 3,000 people and has nearly 900 million tonnes of mineral reserves and resources.  The group's strategy is to continue growing organically and through the acquisition of businesses in the heavyside construction materials market.

 

Tarmac assets acquired in this transaction:

           

Daviot Quarry, Inverness

            Low Plains Quarry, Penrith

            Borras Quarry, Wrexham

            Minffordd Quarry & Asphalt Plant, near Porthmadog

 

Breedon ready-mixed concrete plants divested in this transaction:

           

Alrewas                                                           Llanelli

Banbury                                                           Llynclys

Boroughbridge                                                Meriden

Bournemouth                                                  Pembroke

Briton Ferry                                                     Portsmouth

Cardigan                                                         Scorton

Carmarthen                                                     Shawell          

Colchester                                                      Southampton

Dumfries                                                         Stancombe

Exeter                                                              Tredegar

Halecombe                                                      Wellington

Llandybie

                                                                       

                                                                       

For further information:

 

Breedon Group plc                                            Cenkos Securities plc

Pat Ward, Group Chief Executive                        Max Hartley (NOMAD & joint broker)

Rob Wood, Group Finance Director                     020 7397 8900

01332 694444

                                                                              Numis Securities (joint broker)

Stephen Jacobs, Head of Communications         Ben Stoop/Heraclis Economides

07831 764592                                                       020 7260 1000


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