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HeidelbergCement Doesn't Anticipate Hanson Bid Tussle with Lafarge

May, 09 2007

HeidelbergCement AG, Germany's biggest cement maker, said it doesn't expect to spark a bidding contest for Hanson Plc should it offer to buy the world's biggest supplier of sand and gravel to the construction industry. Chief Executive Officer Bernd Scheifele said he does ''not really'' anticipate counterbids from competitors including Lafarge SA, the world's No. 1 cement producer. HeidelbergCement said it's still ''reviewing its options'' regarding an approach for Hanson, which has a market value equivalent to $15 billion. ''Such a big deal is just one option,'' Scheifele said in an interview on the fringes of the Heidelberg-based company's annual investor meeting today. ''We're not under pressure -- growth is in double digits at the moment. Another option would be to continue with bolt-on acquisitions as we have in past years.'' HeidelbergCement said on May 3 it might seek to buy London- based Hanson in the global building-materials industry's biggest-ever takeover. The acquisition would boost sales by two- thirds, improve access to U.S. construction markets and extend the company's product range with concrete pipes and bricks. Shares of HeidelbergCement, controlled by billionaire industrialist Adolf Merckle, rose as much as 1.67 euros, or 1.4 percent, to 119.75 euros and were trading at 118.66 euros as of 12:53 p.m. in Frankfurt. The stock has added 7 percent so far this year for a market value of 13.7 billion euros ($19 billion). Hanson shares advanced as much as 16.5 pence, or 1.6 percent, to 1,046.5 pence before trading little changed for a value of 7.34 billion pounds ($15 billion). The London-based company has written to investors suggesting that they take no action on their holdings while HeidelbergCement considers its options, it said in a statement today. Earnings Surge First-quarter net income at the German company tripled to 109 million euros from 29 million euros a year earlier, it said today. Sales rose 18 percent to 2.06 billion euros, helped by Asian demand and a mild winter that encouraged building work in Europe. Chinese cement volumes were spurred by growth in the southern province of Guangdong, while sales also gained in Turkey and Indonesia. HeidelbergCement plans to boost cement production in India by setting up a two million-ton facility in the western state of Gujarat. European cement deliveries increased across the board, today's statement said, aided by the mild winter. Warm temperatures and a low snowfall have already boosted companies including Austria's Wienerberger AG, the world's biggest brickmaker, where first quarter profit rose fivefold. Growth in Germany is being led construction investments and consumer spending and the country is ''increasingly regaining its role as Europe's growth engine,'' HeidelbergCement said. To contact the reporter on this story: Stefanie Haxel in Frankfurt at shaxel@bloomberg.net

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