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HeidelbergCement puts Hanson UK up for sale

May, 24 2009


Hanson UK, the British rump of the once-mighty Hanson building empire and one of the country's leading construction suppliers, has been put up for sale for more than £1billion.

The company's heavily indebted German parent, Heidelberg-Cement, is understood to have started sounding out potential bidders at the start of the month.

Sources close to the group say it has appointed Frankfurt-based Commerzbank to handle the sale.

Hanson UK, which employs 6,500 people at 350 sites, is part of Hanson Global, which HeidelbergCement bought in 2007 for £7.8billion.

That has left the company with debts of £5.3billion, which have become more difficult to service with the severe downturn in construction.

HeidelbergCement, which is owned by the family of Adolf Merckle, the German billionaire who committed suicide in January, announced this month its intention to sell £1.7 billion of assets to help pay back the banks. And accordingto Howard Seymour, an analyst-at broker Numis Securities, Hanson UK is likely to be broken up to facilitate a sale. It has four divisions - aggregates and asphalt, concrete, building products and cement.

'Many of the leading construction suppliers would be unable to make an acquisition of this size,' said Seymour. 'Like Heidelberg-Cement, several have witnessed their divisions lose value in the past year. Companies are most likely to cherry-pick assets.'

He added that businesses such as CRH, the Irish building materials giant, and Holcim, the Swiss worldwide supplier of cement and aggregates, could look to acquire major parts of Hanson UK.

A CRH spokesman confirmed the company was looking at acquisitions after raising £1billion through a rights issue in March but would give no detail. Holcim, HeidelbergCement and Commerzbank all refused to comment.

However, a spokesman for Hanson UK said HeidelbergCement was looking to sell parts of its building products division. This includes Thermalite, the aerated blocks business, which Hanson acquired in 2006 for £120 million.

However, he also declined to comment on the sale of Hanson UK as a whole.

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