The Mittal family has agreed to acquire assets in the British construction materials industry from Anglo American and Lafarge for a total of £285 million pounds (Rs 2,449 crore).
The assets are being acquired by Mittal Investments, the private investment vehicle of Lakshmi Mittal’s family and will be combined together under a yet-to-be-announced name. It would become a “new and strong competitor” in the heavy building materials segment in the UK, the investment vehicle said.
“We are attracted to these assets as we have confidence in the growth of the UK economy and more specifically the construction sector,” it said, adding that the new company would be well positioned when the construction sector recovers.
The deal comes at a time when the British economy remains under pressure. While the country exited recession last month its outlook remains gloomy.
Earlier this week the Governor of the Bank of England warned that the country faced a “period of persistent low growth,” and that recovery would be “slow and protracted.”
The latest Markit Purchasing Managers Index for the UK construction sector published at the start of November noted a “subdued trend” in output levels, up fractionally in October, month-on-month, reflecting a continued downturn in new business volumes. Business expectations for the sector also remain low.
The assets being acquired include a cement plant with a capacity of 1.4 million tonnes, 172 concrete plants, quarries and asphalt plans and the 50 per cent stake in Midland Quarry Products owned by Anglo America’s subsidiary, Tarmac.
Up to £30 million (Rs 263 crore) of the agreed deal is contingent on performance of the assets over the next three years.
Britain’s Competition Commission had set the sale of these assets as a requirement for Anglo American and Lafarge’s plans to create a UK joint venture between various construction material businesses.