Aggregate agrees £1.8bn takeover

QUARRIES giant Aggregate Industries has agreed to a £1.8bn takeover deal from Swiss group Holcim. The tie-up with the Leicestershire-based company will give Holcim an entry into the UK market and boost its presence in the United States.

The world number two in cement had offered 138p a share for Aggregate, run by the charismatic Peter Tom, owner of Leicester Tigers rugby club, for some 20 years.

Peter Tom, who will remain as Aggregate chief executive, said the offer provided 'significant value' for shareholders.

Only last March, the shares were trading as low as 80½p. Holcim's offer would value Aggregate at a 34% premium to its average share price in the past month.

Tom added: 'It creates the opportunity to further develop the combined aggregates business, backed by the resources of the enlarged Holcim group.'

Aggregate runs 142 quarries in the UK and the US, with more than 5bn tonnes of reserves, 164 ready-mix concrete plants, 90 asphalt plants and 32 pre-cast concrete factories.

Its UK operation also includes Bradstone garden products, Charcon landscaping and the Masterblock concrete block division.

Zurich-based Holcim is one of the world's leading suppliers of cement, as well as gravel and sand and concrete and construction-related services. It operates in more than 70 countries and employs more than 48,000 people.

Aggregate has long been considered too small to remain independent. Holcim last year had sales of 12bn Swiss francs (£5.4bn) compared with Aggregate's £1.46bn turnover for 2003.

Tom has pursued an aggressive expansion strategy across the Atlantic, although Aggregate still derives half of its business from the UK. Last year, British operations were hit by the wet weather.

Tom's 20.4m shares in the business would be worth some £30m if the bid goes through. The company's share price remained unchanged at 139¾p in early morning trading.