Blue Circle in talks with Egyptian producer

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BLUE CIRCLE Industries, the beleagured UK cement maker, announced yesterday that it was in advanced talks to acquire a majority stake in a state-owned Egyptian producer.

Blue Circle, which has been dogged by takeover rumours since issuing a profits warning in October, is expected to complete the deal to acquire a majority stake in Alexandria Cement later this week.

It is understood that the UK company has fought off competition from Greece's Titan Cement, whose largest shareholder is France's Lafarge, to acquire the Egyptian group.

Blue Circle recently bought Halkis and Heracles Cement, the Greek cement producers, to consolidate its position in the Mediterranean market. The company claims to have a war chest of about pounds 500m to spend on acquisitions. A spokesman said yesterday: "We are always looking at opportunities to grow the business."

Speculation is rife that Blue Circle, the UK's biggest cement producer, may be snapped up by Hanson or Lafarge amid widespread consolidation in the UK building materials sector.

If a bid was launched, it would be the third such takeover this month after RMC Group bought Rugby for pounds 896m and Anglo American acquired Tarmac for $2bn. (pounds 1.24bn). A spokesman for the Blue Circle yesterday refused to comment on the rumours.

Blue Circle shares closed down 5.5p at 339p.