HeidelbergCement buys Hanson

HeidelbergCement AG, Germany's largest cement maker, has agreed to buy Hanson Plc of the U.K. for $16 billion) in the global building-materials industry's biggest-ever takeover. The deal allows HeidelbergCement, controlled by German billionaire Adolf Merkle, to increase revenue by two-thirds, expand in the U.S. and bolster output of aggregates, as wellas pipes and bricks. The Heidelberg-based company employs 46,000 people in more than 50 countries and gets almost half its revenue from Europe, with cement accounting for 50 percent of production. Hanson has 26,000 workers in 14 nations and derives half its sales from North America, with 69 percent of output from aggregates.

Hanson a target?

HeidelbergCement AG, Germany's biggest cement maker, said it may offer to buy Hanson Plc, one of the world's largest suppliers of crushed stone. Hanson stock surged 20 percent, giving a market value $14.6 billion. "HeidelbergCement is currently reviewing its options with respect to its interest in Hanson, including the possibility of seeking to acquire the company,'' the Heidelberg, Germany-based company said in a statement. What would HeidelbergCement stand to gain? Acquiring Hanson would boost the company's revenue by more than two-thirds, add operations in Australia and bolster its range of products such as crushed rock, concrete pipes and bricks. The German company, which gets about half its sales from cement, has already expanded in Asia and eastern Europe to counter a decade-long construction slump at home. The deal makes sense on paper, but is it do-able? Some experts says it's possible, some say it's all talk. Your comment?

Hanson weighs in

The third largest producer in the U.S. market has weighed in with financial results. Hanson plc posted a 12 percent increase in second-half profit, buoyed by acquisitions and demand for asphalt and gravel from U.S. road-builders. Pretax profit advanced to 287.6 million pounds ($561 million) from 257 million pounds a year earlier. Sales at the London-based company rose 8.6 percent to 2.14 billion pounds. Hanson gets almost half its revenue from North America. "Infrastructure spending in the U.S. is a robust program and a very good platform for our business,'' Chief Executive Officer Alan Murray said. "Aggregates are a scarce reserve and we encourage strong price discipline to recover cost increases.'' (Scarce? Hmmmmm.) Hanson stock rose to its highest level in almost five months on Feb. 20 as Vulcan Materials Co.'s purchase of Florida Rock Industries Inc. bolstered optimism about building demand in the U.S. Hanson has itself been the subject of takeover speculation, spoken about both as a target for Mexico's Cemex SA and as a potential partner for Rinker Group Ltd. of Australia, as it fights off a takeover by Cemex. Your comment?