HeidelbergCement buys Hanson for $1.4bn

HeidelbergCement is to sell its Hanson Building Products subsidiary to Texan private equity firm Lone Star Funds for $1.4bn. 

Hanson, which operates in the UK and the US, makes a range of construction materials, including bricks, tiles and concrete and steel pipes. It was once part of the business empire of the controversial British businessman and corporate raider Lord Hanson, before being sold to HeidelbergCement in 2007. 

Bernd Scheifele (pictured), the chief executive of Heidelberg, said: "Hanson is a multinational business with leading market positions, but the focus of its product portfolio on bricks, pressure and gravity pipes and precast is outside the core businesses of HeidelbergCement." 

Scheifele said Heidelberg would use the money to pay off some of its debt. He said: "This is an important step towards reaching our target financial metrics that are relevant for improving our credit-worthiness." 

He added that it would clear the way for the German company to focus on its core raw materials refining operations. 

Hanson Building Products has a staff of 4,621 and owns 107 manufacturing plants and 11 distribution facilities, in America, Canada and the UK. In 2013, it had a turnover of $1.1bn. 

The deal, which is subject to the usual regulatory approvals, is expected to be concluded in the first quarter of this year. 

Heidelberg paid a reported $18bn for Hanson plc in 2007 in what was the biggest-ever deal in the building products industry.  

Most of that business, including what HeidelbergCement described to GCR as "the huge double-digit billion tons aggregates reserves", remains with HeidelbergCement. 

(This is a corrected version of an earlier article which stated that the business sold to Lone Star for £1.4bn was the same as the business bought in 2007, implying a multi-billion loss for the same asset. As Hanson Building Products was only a part of Hanson plc, this was incorrect, and was due to an editing error.)