US PRIVATE equity behemoth KKR is in negotiations to acquire Lafarge Tarmac, one of the UK’s largest building materials companies, it came to light yesterday.
KKR has teamed up with FTSE 100-listed materials supplier CRH, with the pair jointly bidding €6bn (£4.5bn) for assets put in the shop window by Swiss building giant Holcim and its French counterpart Lafarge.
Holcim and Lafarge are looking to sell off operations in 11 countries to smooth the way for a merger between the two. The Irish CRH is thought to be in the best position to snap up the Holcim-Lafarge assets – after confirming it was in talks with the pair last week – but any deal could be scuppered by regional competition laws. Consequently, the Dublin-based firm has drafted in KKR on the deal in a bid to cool some of the regulatory heat. And KKR is reported to have shown particular interest in Holcim-Lafarge’s British assets, including the flagship Lafarge Tarmac. But KKR and CRH still face strong competition for the much-admired assets, with a number well-known US private equity players thought to be still in the running.
Based in Solihull, Lafarge Tarmac was established in 2011 through a joint venture between Lafarge UK and the local building materials division of London-based mining titan Anglo American. It manufactures cement, tarmac and other building materials, and is thought to be worth around £1.7bn.
The firm employs 6,600 staff at its 330 sites. The company’s owners had planned to list it on the London Stock Exchange but those plans were quashed after the merger between Holcim and Lafarge was agreed.
Anglo American offloaded its stake in the company to Lafarge last year for around £885m in order to smooth the way for the business to be sold off in its entirety.
KKR and CRH declined to comment.