Lafarge S.A. announces that certain North American assets to be acquired as part of the Blue Circle acquisition will be managed by Lafarge Corporation, its majority owned North American Subsidiary.
The agreement provides for a fixed annual management fee plus incentives for improving operating results. The agreement includes an option for Lafarge Corporation to purchase the assets anytime between July 1, 2002 and December 31, 2004 at a fixed call price of $1.4 billion, subject to certain adjustments at the time of the exercise. During the period covered by the management contract, the assets will remain the property of Lafarge S.A. and their results will be consolidated with those of Lafarge S.A.
The management agreement will come into effect simultaneously with the closing of the BCI acquisition expected on 11th July 2001.
The assets of Blue Circle covered under the management agreement concluded today include:
Five cement manufacturing plants with a combined capacity of 4.8 million tons of clinker (an intermediary product in the cement manufacturing process) :
- Calera, Alabama, now finishing a modernization program that will more than double plant capacity and dramatically reduce costs;
- Harleyville, South Carolina which increased production by 50 percent in 1998 with a new kiln and which has strong market positions in Charleston and Columbia, South Carolina and Raleigh-Durham and Charlotte, North Carolina ;
- Ravena, New York, a leading supplier to the major urban markets of Boston, Hartford, Bridgeport, Connecticut and New York City;
- Atlanta, Georgia, serving the fast-growing metropolitan Atlanta with dedicated downstream concrete businesses;
- Tulsa, Oklahoma, with primary markets in Tulsa and Oklahoma City.
- Eleven cement terminals of which seven are on water ; a recently completed deepwater terminal in Charleston, South Carolina, one of the largest such facilities in the U.S. with 90,000 tons of storage;
- A grinding plant for slag, a cement-like byproduct of steel making, at Sparrow's Point, outside Baltimore and with more than 900,000 tons of sales ;
- Thirteen aggregate-producing pits and quarries in Georgia and Alabama with more than 11 million tons of annual sales; added to Lafarge Corporation's existing sales of more than 110 million tons, this further solidifies Lafarge's position as one of the top five aggregate producers in North America ;
- 61 ready-mixed concrete plants and several concrete block plants that are downstream users of cement and aggregates; these businesses produce approximately 3.5 million cubic yards of sales annually.
Additionally, under a separate agreement, Lafarge Corporation will purchase certain aggregate assets outright that are not part of the U.S. asset management agreement. Those businesses include four sand and gravel operations in Ontario and one near Buffalo, N.Y., which have more than 2.5 million tons of sales annually. Also included are two ready-mixed concrete plants in Ontario and a cold patch asphalt business with operations in Canada and the U.S. The purchase price of these assets is approximately CDN$20 million.
Lafarge is world leader in building materials. It has 66,000 employees in 71 countries and holds top-ranking positions in all four of its Divisions – Cement, Aggregates & Concrete, Roofing and Gypsum. In 2000, the Group recorded sales of €12.2 billion.