Breedon complete asset swap with Tarmac
Company secures 25 million tonnes of reserves and 50,000 tonnes of additional asphalt capacity
Further to the announcements made on 13 December 2017 and 26 April 2018, Breedon Group have now 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 (pictured), 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 operate 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 (CMA), which has accepted remedies proposed by Tarmac – and accepted by Breedon – in relation to any potential competition concerns arising from it.
A spokesperson for Tarmac said: ‘We are pleased to confirm that our acquisition of 23 ready-mixed concrete sites and a marine wharf from Breedon Group has now completed, following approval by the CMA. This is exciting news for our business and complements our offer to customers.’