Anglo American has taken another step forward in its restructuring programme by selling the European assets of its Tarmac business for £254 million.
The London-based mining group, which focuses predominantly on South Africa, has sold the business to two purchasers. Eurovia, a subsidiary of Vinci Group, will buy Tarmac's construction aggregates businesses in France, Germany, Poland and the Czech Republic.
Eurovia carries out construction, upgrading and maintenance of road and railway infrastructure across 15 countries. It employs around 41,500 people and in 2009, generated revenues of Ôé¼8 billion.
Innova/4 LP, a central Europe-based private equity group, will buy Tarmac's Polish concrete products business.
The Tarmac units sold accounted for around ┬ú126.5 million of revenue and 20 per cent of Tarmac's profits last year. The bulk of TarmacÔÇÖs profits are generated by its UK operations, which are yet to be sold.
The UK assets, which lead the UK market in aggregates, asphalt, mortar and ready-mix concrete, with significant operations in concrete products, lime and cement, are said to be worth roughly £1.5 billion.
Tarmac has 135 quarries, 172 concrete plants and 73 asphalt operations that manufactured eight million metric tons of asphalt last year. Tarmac contributed two per cent of AngloÔÇÖs overall operating profit that year and accounted for 10 per cent of its net operating assets.
Vinci Group said in a statement that the assets it agreed to purchase have an annual output of around 30 million tons.
As one of AngloÔÇÖs non-core assets, Tarmac was initially earmarked for disposal in 2008, but the sale was hampered by stagnating credit markets. The company has been under pressure from shareholders to cut costs and dispose of non-core assets following the merger approach made by Xstrata last year, which Anglo rejected.
It is thought that by selling Tarmac and other assets including its steel units, Anglo could raise at least £4.4 billion.
The company sold around £1.5 billion of assets last year, consisting mostly of its remaining stake in AngloGold Ashanti, in order to focus on commodities in demand by Asian economies, such as copper and iron ore.
The company has also sold its stakes in UK-based Mondi, a paper company, and South AfricaÔÇÖs Highveld Steel & Vanadium.
