Chief executive of Camas, and only two years away from his planned retirement, Mr Shearer lost out to Bardon's Peter Tom in the competition to head up the enlarged group, Aggregate Industries.
Following the merger, which due to tax considerations is being packaged as an all-share takeover of Camas by Bardon, Aggregate will join Tarmac, Hanson, RMC and Redland in the fast-consolidating first division of UK stone and concrete producers. The group will have sales of more than pounds 650m and consented reserves of 2.2 billion tonnes.
It is thought the two companies have been in discussions for at least a year but failure to satisfy the management aspirations of Mr Tom and Mr Shearer held up negotiations until now. Mr Shearer was employed by Camas on a two-year contract paying him just over pounds 200,000 a year.
According to Mr Tom, cost savings of pounds 10m a year will be achieved, partly by shutting both companies' head offices and re-opening a single headquarters near Warwick. The new site was chosen as a central location for the enlarged group's quarries which stretch from Camas's traditional West Country heartland to Bardon's strong presence in Scotland.
The companies also have sizeable operations in the US, where Camas is strong in the mid-western cities of Denver and Minneapolis and Bardon a major player on the east coast, around Washington DC and further north in Boston. Following the merger, Aggregate will make about 45 per cent of its sales in the US and 55 per cent in the UK and mainland Europe.
Under the terms of the offer, Camas shareholders will receive two Bardon shares for each Camas share they hold. Yesterday Bardon's shares closed 3p higher at 44.5p, pushing Camas's shares 9.5p higher to 93.5p.
Last year Bardon made pre-tax profits of pounds 23.4m from sales of pounds 317.6m while Camas reported profits of pounds 22.8m from slightly higher turnover of pounds 338.6m, thanks to a different mix of business which included a higher proportion of lower margin concrete building materials. Bardon ended the year with gearing of 50 per cent against Camas's 28 per cent.
Analysts welcomed the deal, which they said had been timed at the bottom of the UK aggregates cycle. The enlarged group will control two super- quarries in Leicestershire which environmental concerns mean are unlikely to be repeatable. That, together with rising demand after last year's 10 per cent fall in volumes, should ensure recent price rises are held, or improved on this year.
Investment column, page 22Reuse content