Buyer steps up for RMC's German arm

By NEIL THAPAR
Updated:

 

SHARES in RMC group surged 33p to 629p as City analysts estimated the cement maker could raise up to £150m from the sale of its troubled German business after an approach from its bigger rival Heidelberg-Cement.

The German business, which was fined e12m (£8.4m) in a price-fixing scandal earlier this year, has been a major headache for RMC due to industry overcapacity and weak demand. It has been unofficially up for sale for years, but after making a £31m loss in the first half RMC decided to take it off the market.

It is now back on the block after the group confirmed today that Germany's Heidelberg, the world's largest cement producer, had made an unsolicited offer for the business. Although any sale would face considerable hurdles from the German cartel office, analysts believe it could raise between £100m and £150m.

RMC said talks were still at an 'exploratory stage' and it was assessing a sale along with other options. However, the approach could flush out other potential bidders such as Ireland's CRH and Britain's Aggregate Industries.

Both have a relatively small presence in Germany but looming tax cuts by Chancellor Schroeder's government and expectations of a stronger economy next year, means it could be a good time to buy.

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