HeidelbergCement, through subsidiaries Essroc Corp. and Lehigh Hanson Inc., entered into a definitive agreement with Cementos Argos’ subsidiary Argos USA to sell several assets for $660 million. The transaction includes Essroc’s Martinsburg, W.Va., cement plant and seven terminals in Virginia, Maryland and Pennsylvania, plus a Lehigh terminal in upstate New York.
The deal marks the end of a divestment program to address Federal Trade Commission (FTC) concerns that HeidelbergCement’s $4.68 billion purchase of Italcementi from Italmobiliare SpA would harm competition in five regional markets.
“With the disposal of the Martinsburg plant we have successfully finalized our disposal program in the context of the Italcementi acquisition,” said Dr. Bernd Scheifele, chairman of the managing board of HeidelbergCement. “Together with the disposals of the non-core assets and the Belgium assets of Italcementi we have exceeded our €1 billion ($1.1 billion) target on disposal proceeds and thereby further improved the net financial position of HeidelbergCement.”
Argos announced in a statement that JPMorgan is providing a bridge loan to cover the majority of the purchase and act as an adviser to the company. It also stated that it plans to sell assets in the short term to fund the acquisition and cover the loan.
HeidelbergCement expects the transaction to close in the fourth quarter of 2016.