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CRH has power for Tarmac deal

Oct, 26 2009

(Dublin, Ireland) -- When CRH sprung a €1.2bn rights issue last March it was widely expected that Ireland's largest quoted company would use the money to fund a corporate shopping spree.

Now, with mining conglomerate Anglo American having put a clutch of non-core assets, including UK building materials group Tarmac, up for sale, will new CRH boss Myles Lee splash the cash?

Tarmac had sales of $4.37bn (Anglo American reports in dollars) in 2008 and operating (pre-interest) profits of $228m, less than half of the $487m recorded in 2007. Anglo has intimated that it would consider offers in the region of $4bn for Tarmac.

Anglo boss Cynthia Carroll is under pressure as never before. In June, Swiss mining company Xstrata walked away from a proposed "merger", in reality an Xstrata takeover, of the two companies.

With €5bn of purchasing firepower burning a hole in its pocket, most other would-be Tarmac purchasers financially strapped, and a seller anxious to do a deal sooner rather than later, this sounds like the sort of situation that is tailor-made for CRH. Just don't expect Lee to be in any hurry to close the deal. Instead he will probably let Anglo stew for a while yet before finally stepping in to do the deal.

By: Dan White
























Source: www.independent.ie