Lafarge a step closer towards divestment target

Lafarge a step closer towards divestment target

Lafarge has agreed to sell a number of its US cement and concrete assets to Colombian cement maker Cementos Argos for $760 million. The deal is an important step in meeting the divestment targets the heavily indebted French group set this year. "This transaction creates value for our shareholders while maintaining a strong network of operations for future growth in North America," said Bruno Lafont, chairman and chief executive of Lafarge. In February the world's second-largest building materials producer by sales pledged to cut debt by €2 billion and set a global divestment target of at least €750 million this year. The group had net debt of €14.24 billion at the end of March. With the sales to Cementos Argos, Lafarge has achieved 71 per cent of its full year disposal target. The deal has to cleared by the US competition authorities. The assets, which include cement plants in South Carolina and Alabama, generated revenue of about $240 million, which represented about 5.5 per cent of sales in the North America region for Lafarge in 2010. Lafarge became indebted following a €10.2 billion acquisition of Orascom Cement, the Middle East's largest cement maker in 2007 and political unrest in Egypt this year, which hurt its first quarter-profits.

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