Shanks sold to US buyer for pounds 235m
Wednesday 03 February 1999
The buyer is American Standard, the US group whose brands include Ideal Standard, Trevi showers and the Sottini range of upmarket bath products.
The deal creates a combined group with sales of more than pounds 200m and 3,300 workers employed at 15 UK sites.
However, it could be the subject of a competition inquiry as the combined group will control 35 per cent of the ceramic bathroom products markets, such as basins and toilets, a share well ahead of rivals such as Twyfords- Doulton, owned by Caradon and Shires. The group will also have 18 per cent of the acrylic bath market.
Ideal Standard said it was confident there would not be any regulatory problems as the new group's share of the wider European market would be relatively small and imports into the UK account for 25 per cent of the domestic market.
The American company said the two manufacturers were a good fit. Ideal Standard, which is the world leader, is strong in the domestic bathroom sector.
Armitage Shanks, the UK market leader, is strong in the commercial sector with a customer base that includes hospitals, hotels and prisons.
Roger Cooper, managing director of Ideal Standard in the UK, said: "We are now number one in every sector of the bathroom market here, and the two businesses fit very well. There will be a review of synergies and best practices before any other decisions are made."
The company would not comment on possible job losses or plant closures. However, Ideal Standard's factories achieve higher productivity. They generate sales of pounds 85m from 1,100 staff at three sites. Armitage Shanks sales are pounds 120m from 2,200 staff at 12 sites including five in Staffordshire.
The deal follows an intense auction process after Blue Circle put Armitage Shanks up for sale in October. The company will use the proceeds to enhance its core operations in building products, such as cement, and in heating equipment, including Potterton boilers and Myson heaters.
Armitage Shanks was founded in 1817 in Armitage in Staffordshire as a maker of earthenware products including pots and pipes. In the 1860s it was acquired by the Reverend Edward Johns.
Blue Circle bought the company in 1980. In the year to December 1997 the group recorded profits of pounds 24.6m on sales of pounds 174m.
The deal will be one of the last corporate acts of Blue Circle's chief executive Keith Orrell-Jones, who steps down in July. He will leave a cash pile for his successor, Richard Haythornthwaite.
Blue Circle shares closed 20.25p higher at 337.75p.
Name Turnover (pounds ) Pre-tax (pounds ) EPS Dividend Pay day X-div
ARM Holdings (F) 42.268m (26.580m) 9.423m (4.526m) 12.5p (7.1p) - (-) - -
Crest Nicholson (F) 465.4m (353.0m) 28.1m(20.5m) 16.60p (11.75p) 4.75p (3.75p) 08.04.99 08.03.99
Eurodis Electron (I) 146.302m (152.499m) 3.403m (3.611m) *2.79p (3.44p) 2.15p (2.15p) 06.04.99 15.02.99
Independent Energy (I) 88.22m(22.78m) 0.707m (-0.464m) 2.9p (-2.8p) - (-) - -
Internet Technology (F) 11.012m (3.97m) 0.055m(-1.96m) 0.12p (-6.61p) - (-) - -
Northamber (I) 140.851m (149.934m) 4.442m(4.261m) 8.6p (8.4p) 1.5p (- ) 04.05.99 06.04.99
Recognition Systems Group (F) 0.788m (0.773m) -2.260m (-2.255m) -6.3p (-8.1p) - (-) - -
SCI Entertainment Group (I) 3.262m (2.224m) 0.506m(-1.027m) 3.95p (-7.26p) - (-) - -
Skillsgroup (F) 208.4m (377.0m) 14.4m (-16.3m) 12.5p (-23.3p) 5.0p (4.2p) 08.05.99 12.04.99
(F) - Final (I) - Interim (Q) - Quarterly (SP) - Split Period (N) - Nine Months * Adjusted
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