January 8, 2020 / 7:40 AM / 9 days ago

Construction materials firm Breedon to bolster UK presence with CEMEX deal

(Reuters) - British construction materials firm Breedon Group Plc (BREE.L) said on Wednesday it would buy certain UK assets from Mexico’s CEMEX SAB de CV (CEMEXCPO.MX) for 178 million pounds ($233.79 million), as it looks to be a bigger player in Britain and Ireland.

Breedon said the deal will add to its underlying earnings per share in the first full year after the competition of the acquisition in the second quarter of 2020.

The UK assets of CEMEX, a global building material company, includes about 100 operations across Scotland, Wales, North-East England, Norfolk, the East Midlands and Yorkshire.

These assets generated earnings before interest, tax, depreciation and amortization of 23 million pounds in 2018.

The acquisition will be funded by an existing 350 million pounds revolving credit facility, Breedon said.

It will boost the company’s mineral reserves and resources by about 170 million tonnes and Breedon expects an annual net pre-tax cost savings of about 2 million pounds by the third full year following the deal closure.

The deal comes after the downturn in Britain’s construction industry deepened in December, driven by the sharpest drop in civil engineering activity since 2009, a survey showed, underscoring the economy’s frailties at the end of last year.

Reporting by Shanima A in Bengaluru; Editing by Rashmi Aich and Arun Koyyur

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