15 May 2007
Offer for Hanson plc ("the Company")
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO THE SAME WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.
Heidelberg/London, 15 May 2007 – HeidelbergCement AG, headquartered in Heidelberg/Germany, has reached agreement with the board of directors of Hanson PLC on the terms of an acquisition of the entire issued and to be issued share capital of Hanson at a price of 1100 pence in cash for each Hanson Share, valuing Hanson at approximately £8.0 billion. The board of directors of Hanson intends to recommend Hanson shareholders to accept the offer.
HeidelbergCement is one of the leading producers of building materials worldwide, with its core products being cement, ready-mixed concrete and concrete products, aggregates, building materials and related activities. The HeidelbergCement Group employs around 46,000 people in more than 50 countries and generated revenues in excess of €9 billion in 2006. North American operations have a leading role in the revenue of the HeidelbergCement Group, with additional imports from other regions to meet demand. HeidelbergCement has market leading positions in cement across Europe and Central Asia. It is also active in building materials markets in India, China, Indonesia and Africa.
Hanson is one of the world’s largest suppliers of heavy building materials to the construction industry, with turnover in 2006 of £4.1 billion. Its products fall into two categories: “aggregates” (crushed rock, sand and gravel, ready-mixed concrete, asphalt, and cement related products) and “building products” (concrete pipes, pre-cast products, concrete pavers, blocks, tiles and clay bricks). Hanson employs approximately 26,000 people, operating primarily in North America, the UK and Australia with further operations in Asia Pacific and Continental Europe.
The combined group would be the second largest in its industry, on a worldwide basis, by proforma market capitalisation. The combination of HeidelbergCement and Hanson is strategically compelling, creating a strong, market leading, global building materials group, benefiting from:
- leading worldwide positions in key product areas, including being the largest producer of aggregates, the second largest producer of ready-mixed concrete, and the fourth largest producer of cement;
- combined proforma revenues of approximately €15 billion and over 70,000 employees;
- diversification across products and geographies;
- increased vertical integration in many markets around the world; and
- strong building products businesses, particularly in North America and the UK.
The price of 1100 pence per Hanson Share represents a premium of approximately 34 per cent. to the average closing mid-market price of 820 pence per Hanson Share for the three months ended 2 May 2007; and a premium of approximately 29 per cent. to the closing mid-market price of 852 pence per Hanson Share on 2 May 2007.
The Acquisition will be made by Lehigh, a wholly-owned direct subsidiary of HeidelbergCement, and is proposed to be implemented by way of a scheme of arrangement under section 425 of the Companies Act 1985. The scheme will be conditional upon the requisite approval of Hanson’s shareholders and the English Courts. The acquisition will also be conditional upon the satisfaction or waiver of European, Canadian and US competition authority clearance. HeidelbergCement currently anticipates that the transaction will be completed in the third quarter of 2007.
The funds required for the acquisition will initially be provided under a new credit facility entered into with Deutsche Bank and The Royal Bank of Scotland. The credit facility will be partly refinanced through a combination of hybrid capital in an amount of up to €2 billion, the issue of bonds and the divestments of non-core business activities. It is HeidelbergCement’s intention to maintain an investment grade rating for the enlarged group, and to support its objective it intends, in addition to raising the funds required to finance the Acquisition, to undertake a capital increase in an amount of approximately €500 million.
Commenting on today’s announcement, Dr. Bernd Scheifele, CEO of HeidelbergCement, said:
“We are delighted that Hanson has agreed to recommend our proposed offer. It is a defining moment for HeidelbergCement and its shareholders, and is consistent with our focus on strategic expansion into complementary geographies, across diversified products and customer markets.
HeidelbergCement and Hanson are a perfect fit for each other, sharing the same enthusiasm for operational efficiency and focus on adding long-term value; reflecting the exceptional dedication and capability of their respective employees and management teams.
We believe that the combined business will be better able to respond to the evolving needs of its customers in the competitive and rapidly consolidating global building products industry.
We are also pleased to announce that we have asked Alan Murray, CEO of Hanson, to join the top management of HeidelbergCement. His ongoing role is likely to include responsibility for the US and Australian operations.”
Executive Mike Welton, Chairman of Hanson, said:
“The cash offer of 1100 pence per share is more than 12 times Hanson’s EBITDA for 2006 and represents very good value for Hanson Shareholders. Hanson and HeidelbergCement are highly complementary businesses and together will become one of the world’s leading building materials suppliers. I believe the combined group will provide excellent opportunities for many of Hanson’s people around the world.”
Deutsche Bank is acting as financial adviser and broker to HeidelbergCement.
Group Communications & Investor Relations
Dr. Brigitte Fickel
Telephone: +49 (0) 6221 481-0
This announcement is not intended to and does not constitute, or form part of, any offer or invitation to purchase any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Proposals or otherwise. The Proposals will be made solely through the Scheme Document, which will contain the full terms and conditions of the Proposals, including details of how to vote in respect of the Proposals. Any response to the Proposals should be made only on the basis of the information contained in the Scheme Document.
Deutsche Bank is authorised under German Banking Law (competent authority: BaFin - Federal Financial Supervising Authority) and with respect to UK commodity derivatives business by the Financial Services Authority; and is regulated by the Financial Services Authority for the conduct of UK business. Deutsche Bank is acting for HeidelbergCement and Lehigh and no one else in connection with the Proposals and will not be responsible to anyone other than HeidelbergCement and Lehigh for providing the protections afforded to clients of Deutsche Bank nor for providing advice in connection with the Proposals.
Rothschild, which is authorised and regulated by the Financial Services Authority in the United Kingdom, is acting exclusively for Hanson and no one else in connection with the Proposals and will not be responsible to anyone other than Hanson for providing the protections offered to clients of Rothschild nor for providing advice in relation to the Proposals or any other matters referred to in this announcement.
Hoare Govett is acting as sole corporate broker to Hanson, and no one else in connection with the Proposals and will not be responsible to anyone other than Hanson for providing the protections afforded to the clients of Hoare Govett nor for providing advice in relation to the Proposals or any other matter referred to herein.
The availability of the Proposals to persons who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions. Persons who are not so resident should inform themselves about and observe any applicable requirements in those jurisdictions. Further details in relation to overseas shareholders will be contained in the Scheme Document.
The distribution of this announcement in jurisdictions other than England and Wales may be restricted by law and therefore persons in such jurisdictions into whose possession this announcement comes should inform themselves about and observe such restrictions. Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction. This announcement has been prepared for the purposes of complying with English law and the Takeover Code, and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside of England and Wales.
Hanson will prepare the Scheme Document to be distributed to Shareholders. HeidelbergCement, Lehigh and Hanson urge Hanson Shareholders to read the Scheme Document when it becomes available because it will contain important information relating to the Proposals.
Lehigh reserves the right to elect to implement the acquisition of the Hanson Shares by way of a takeover offer (as such term is defined in Part 28 of the Companies Act 2006). In such event, the Offer will be implemented on the same terms (subject to appropriate amendments), so far as applicable, as those which would apply to the Scheme, except that the Offer may exclude Hanson Shareholders resident in certain overseas jurisdictions. If Lehigh exercises its right to implement the Acquisition by means of the Offer, the Offer will be made in compliance with applicable laws and regulations.
The Proposals relate to the shares of a UK company and are proposed to be made by means of a scheme of arrangement under English company law. A transaction effected by means of a scheme of arrangement is not subject to the tender offer rules under the Exchange Act. Accordingly, the Scheme is subject to the disclosure requirements, rules and practices applicable in the United Kingdom to schemes of arrangement, which differ from the requirements of US tender offer rules. Financial information included in the relevant documentation will have been prepared in accordance with accounting standards applicable in the UK and Germany that may not be comparable to the financial statements of US companies.
This announcement including information included or incorporated by reference in this announcement includes 'forward-looking statements' under United States securities laws, including statements about the expected timing of the Acquisition, the expected effects on Hanson of the Acquisition, anticipated earnings enhancements, estimated cost savings and other synergies, potential strategic options, plans for and benefits of integration, estimated future growth, market position and all other statements in this announcement other than statements of historical fact. Forward-looking statements include, without limitation, statements that typically contain words such as 'will', 'may', 'should', 'continue', 'aims', 'believes', 'expects', 'estimates', 'intends', 'anticipates', 'projects', 'plans' or similar expressions. By their nature, forward-looking statements involve known or unknown risks and uncertainties because they relate to events and depend on circumstances that all occur in the future. Actual results may differ materially from those expressed in the forward-looking statements depending on a number of factors, including, but not limited to, the satisfaction of the conditions to the Acquisition, future market conditions, the behaviour of other market participants, an adverse change in the economic climate, a fluctuation in the level of clients' commercial activity, appropriate consultation with employee representative bodies, a loss of key personnel and the extent to which the Hanson and HeidelbergCement businesses are successfully integrated. Many of these risks and uncertainties relate to factors that are beyond the companies' abilities to control or estimate precisely, such as future market conditions and the behaviours of other market participants and, therefore undue reliance should not be placed on such statements. The forward-looking statements contained in this announcement are made as of the date hereof and Hanson, HeidelbergCement and Lehigh assume no obligation and do not intend publicly to update or revise these forward-looking statements, whether as a result of future events, new information or otherwise except as required pursuant to applicable law.
The Loan Notes that may be issued pursuant to the Proposals have not been and will not be registered under the Securities Act or under the relevant securities laws of any state or territory or other jurisdiction of the United States. Accordingly, Loan Notes may not be offered or sold in the United States, except in a transaction not subject to, or in reliance on an exemption from, the registration requirements of the Securities Act and such state securities laws.
Any Loan Notes which may be issued pursuant to the Proposals have not been and will not be registered under the relevant securities laws of Japan and any relevant clearances and registrations have not been, and will not be, obtained from the securities commission of any province of Canada. No prospectus in relation to the Loan Notes has been, or will be, lodged with, or registered with, the Australian Securities and Investments Commission or the Japanese Ministry of Finance. Accordingly, unless otherwise determined by Lehigh and permitted by applicable law and regulation, the Loan Notes may not be offered, sold, resold, transferred, delivered or distributed, directly or indirectly in or into Canada, Australia or Japan or any other jurisdiction where to do so would violate the laws of that jurisdiction or would require registration thereof in such jurisdiction.
No other listing authority or equivalent has reviewed, approved or disapproved this announcement, the Proposals or the Loan Notes nor has it expressed a view on the accuracy or adequacy of this announcement.
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the Takeover Code, if any person is, or becomes, “interested” (directly or indirectly) in 1 per cent. or more of any class of “relevant securities” of Hanson, all “dealings” in any “relevant securities” of that company (including by means of an option in respect of, or a derivative referenced to, any such “relevant securities”) must be publicly disclosed by no later than 3.30 p.m. (London time) on the London business day following the date of the relevant transaction. This requirement will continue until the date on which the Scheme becomes effective, lapses or is otherwise withdrawn or on which the “offer period” otherwise ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an “interest” in “relevant securities” of Hanson, they will be deemed to be a single person for the purpose of Rule 8.3.
Under the provisions of Rule 8.1 of the Takeover Code, all “dealings” in “relevant securities” of Hanson by HeidelbergCement, Lehigh or Hanson, or by any of their respective “associates”, must be disclosed by no later than 12.00 noon (London time) on the London business day following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose “relevant securities” “dealings” should be disclosed, and the number of such securities in issue, can be found on the Takeover Panel's website at www.thetakeoverpanel.org.uk.
“Interests in securities” arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an “interest” by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the Takeover Code, which can also be found on the Panel's website. If you are in any doubt as to whether or not you are required to disclose a “dealing” under Rule 8 you should consult the Panel.
Capitalised terms shall have the meaning attributed to them in the Rule 2.5 announcement made by HeidelbergCement on 15 May 2007.