Government Seeks Review of Anglo American's $2bn Tarmac Acquisition

Strategic Insights -

The UK government has requested that the European Commission refer the proposed acquisition of aggregates producer Tarmac by global mining giant Anglo American to UK competition authorities for review. The deal, worth $2bn (£1.24bn), has raised concerns over competition in the UK's aggregates market. Anglo American's industrial minerals business would gain a 26% share of Britain's aggregates market, a 23% share of the UK's ready-mixed concrete market, and a 35% share of the British asphalt market without any disposals.

Key Takeaways:

  • The UK government has requested that the European Commission refer the proposed acquisition of Tarmac by Anglo American to UK competition authorities for review.
  • The acquisition, worth $2bn (£1.24bn), has raised concerns over competition in the UK's aggregates market.
  • Anglo American's industrial minerals business would gain a 26% share of Britain's aggregates market, a 23% share of the UK's ready-mixed concrete market, and a 35% share of the British asphalt market without any disposals.
  • The deal is being considered because less than two-thirds of Anglo's European turnover is in the UK.
  • The acquisition is part of Anglo American's strategy to reduce its exposure in South Africa and expand its industrial minerals business.
  • Anglo American has also signed a deal to acquire several big copper mines in Zambia, with a deadline for completion set for January 31.
  • The deal will see Anglo American's subsidiary, Zambia Copper Investments (ZCI), take an 80% interest in the Konkola, Nchanga, and Nampundwe mines, which account for 70% of Zambia's total copper production.
  • Zambia Consolidated Copper Mines (ZCCM) will receive a 5% free and 15% repayable delayed participation in Konkola Copper, as well as a cash consideration of $30m and a deferred consideration of $60m.

Statistics:

  • The proposed acquisition of Tarmac by Anglo American is worth $2bn (£1.24bn).
  • Anglo American's industrial minerals business would gain a 26% share of Britain's aggregates market.
  • The company would also gain a 23% share of the UK's ready-mixed concrete market.
  • Anglo American's industrial minerals business would gain a 35% share of the British asphalt market.
  • Less than two-thirds of Anglo's European turnover is in the UK.
  • Anglo American is set to acquire several big copper mines in Zambia, with a deadline for completion set for January 31.
  • The deal will see Zambia Consolidated Copper Mines (ZCCM) receive a 5% free and 15% repayable delayed participation in Konkola Copper.
  • ZCCM will also receive a cash consideration of $30m and a deferred consideration of $60m.

Sources:

  • Reuters