CEMEX has announced that it has agreed to sell part of its UK business to Breedon Group plc, a leading construction materials group in Great Britain and Ireland. Breedon will pay $US235m including debt of approx. US$31m for the divested sites which are in markets with a better fit for the buyer. The proceeds from this divestment will be used mainly for debt reduction and general corporate purposes.
The business being sold comprises 49 readymix plants, 28 aggregate quarries, 4 depots, 1 cement terminal, 14 asphalt plants and 4 concrete products operations. Part of the Paving Solutions business is included in the sale as well as some inactive sites and they will all be integrated into Breedon’s business. Details of the active sites included in the transferring business have been provided.
CEMEX remains committed to the UK market, after the divestment we will have approx. 2,200 employees contributing to annual sales revenues in excess of £600M (based on 2018 Full Year results). The profit margin of UK will increase as the combined performance at a business level of the assets being sold is below the performance of the retained UK assets.
Following the divestment the UK portfolio will include 2 cement plants and Tilbury mill, 138 ready-mix plants, 27 active aggregate quarries, 12 depots, 10 aggregate wharves, 16 asphalt plants, 5 concrete products operations and 4 Dry Silo Mortar plants. We will not completely exit any of the areas affected, retaining 5 locations in Scotland, 6 in the North East and 10 in Wales and the South West. In addition, we will continue to supply cement to the divested operations after the sale.
Breedon already operates 2 cement plants and around 80 quarries, 40 asphalt plants, 170 readymix plants, 9 concrete and clay products plants, 4 contract surfacing businesses, 6 import/export terminals and 2 slate production facilities.
The change of ownership will not happen straight away. It is currently anticipated that the sale will complete at the end of the first quarter 2020, but this will depend on a number of steps that need to happen first, including an information and consultation process with affected employees. In the meantime, it will be business as usual in most respects.
We want to reassure you that we will do all we can to make the transition as smooth as possible. If you have any questions please ask your line manager in the first instance. More information will be coming to those directly affected by the changes over the next few weeks.