London-based miner Anglo American Plc (LON:AAL) welcomed on Tuesday the ruling of UK’s competition regulator on its planned joint venture with French cement producer Lafarge (EPA:LG) and expressed confidence that they would be able to meet the conditions attached to the approval.
The Competition Commission (CC) unveiled earlier today its final report on the investigation into the British JV planned by Anglo and Lafarge, asking the two partners to sell a substantial operations portfolio in order to win its approval.
In response, Anglo said it would work closely with the regulators towards a positive outcome and the conclusion of the JV deal as soon as possible.
Lafarge also reacted by saying that despite the required disposals, the proposed business combination would generate recurring synergies through enhanced operational efficiencies, improved logistics and value-added products.
The 50/50 venture, agreed last year, would merge Anglo American’s Tarmac UK with Lafarge’s construction materials operations in the UK into a business with combined sales of GBP1.8bn (USD2.9bn/EUR2.2bn) and EBITDA of GBP210m in 2010, the two companies have said.
The regulator, which expressed concerns in February that the JV would hurt competition in certain segments of the building materials market, said today it was still standing by that ruling. Before the JV deal can move ahead, Anglo and Lafarge have to sell operations including cement plants, rail depots, RMX plants and aggregate quarries, in order to protect consumers interest in key segments, especially since a lot of construction work is publicly funded, the CC said.