CRH in Lafarge Tarmac talks with KKR

Irish Group in discussions with private equity firm over possible sale of UK Lafarge Tarmac business

CRH plc are in talks with global private equity firm KKR about selling the UK Lafarge Tarmac business which they will gain as part of their €6.5 billion (£4.9 billion) acquisition of a package of assets from Lafarge and Holcim.

On Monday, CRH announced the biggest deal in the company’s history, which is set to make the Dublin-based Group the world’s third largest building materials supplier.

However, it is thought that CRH may have to sell off Lafarge Tarmac for competition reasons, and that they could strike a deal with KKR to offload any assets which might cause problems with the regulators.

One possibility is that KKR could become a co-investor in Lafarge Tarmac with the option of later buying the entire UK business.

Other press reports this week claimed that CRH’s negotiations with KKR about the Lafarge Tarmac business were not being driven by competition concerns, as the Irish company does not currently have a presence in the UK market.

Albert Manifold, chief executive officer of CRH, was quoted in The Telegraph as saying the potential sell-off of Lafarge Tarmac was not a reflection on CRH’s views on the UK, but the company’s assessment on ‘how much capital to allocate to the UK’.