Tarmac and Marley agree bricks-for-tiles swap

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The Independent Online
TARMAC and Marley, the building materials groups, have agreed an asset swap under which Tarmac will acquire Marley's bricks business in exchange for its clay tile interests, writes Heather Connon.

But a Tarmac spokesman warned that the deal did not mean Tarmac was committed to brick manufacture. 'It strengthens our position so that whether we decide to sell it or keep it we have a better business,' he explained.

Under the deal Marley will pay Tarmac pounds 3m and take on the Hawkins clay tile business, based in Staffordshire. The business has net assets of pounds 23.8m and made an pounds 86,000 loss on sales of pounds 2.52m last year. It has an annual capacity of about 30 million clay tiles, although it is producing only about half that.

Tarmac bought the business for pounds 7m in 1987 and has since made further investment. Marley is already the largest concrete tile manufacturer in Britain and had been keen to gain a presence in clay tiles.

Its three brick plants - in Nottingham, Yorkshire and Scotland - were acquired in 1987 and 1988 for pounds 47.8m. Although the swap has been made at the pounds 14.7m book value, it will have to charge pounds 33m of goodwill previously written off to reserves against profits.

The businesses have a capacity of about 100 million bricks a year, but produce about 55 per cent of that and last year made a pounds 3.2m loss.