Cement maker Lafarge and miner Anglo American have agreed to sell British assets for up to 285 million pounds ($452 million), clearing the way for a building materials joint venture in the country.
The sale, to Indian steel tycoon Lakshmi Mittal, was a condition set by Britain's Competition Commission to allow the two firms to combine their building materials activities.
Lafarge and Anglo said on Friday they would sell a number of construction materials operations in Britain as well as Anglo unit Tarmac’s 50% interest in Midland Quarry Products, one of the UK’s main suppliers of hard rock and asphalts.
Nomura analysts said the deal could be seen as a positive for investors fretting over a potential rights issue at the Mittal family's debt-burdened flagship asset, ArcelorMittal , the world's largest steelmaker.
Spending $450 million on construction material assets now does not necessarily sound like someone who is thinking about imminently piling in a few billion dollars into his steel business as part of an equity raise, they said.
Anglo, refocusing on core mining activities, struggled for more than three years to find a buyer for Tarmac before agreeing last year to a joint venture with France-based Lafarge’s British cement, aggregates, concrete and asphalt businesses.
The price for the assets, which include one of the UK’s largest cement plants, includes up to 30 million pounds contingent on future performance.