HeidelbergCement to Buy Hanson for $16B

Wed May 16, 2007 - National Edition

FRANKFURT, Germany (AP) HeidelbergCement AG said May15 it would buy British building materials company Hanson PLC for $15.8 billion, a deal that will create the second-biggest cement and materials business in the world.

The company agreed to pay $21.08 a share for London-based Hanson. The takeover had been brewing for a couple of weeks.

The deal will put the combined company behind only France’s Lafarge SA and is indicative of the deal-making going on in the building sector. Already, Mexican cement company Cemex SA is bidding more than $14 billion for Australia’s Rinker Group Ltd.

Shares of Hanson rose 3.3 percent to $21.64 in London while shares of HeidelbergCement rose 0.3 percent to $160.07 in Frankfurt.

In a conference call, HeidelbergCement Chief Executive Bernd Scheifele said the deal would be funded with debt, new stock and some disposals. Including debt, the total deal value is $18.83 billion.

Elisabetta Zorzi of Fitch Ratings said the deal would “substantially strengthen’’ HeidelbergCement’s market position.

The takeover is subject to approval by British and European Union regulators.

HeidelbergCement employs approximately 46,000 workers in more than 50 countries while Hanson employs 26,000 workers in 14 countries.