Approach made for RMC unit in Germany

The cement maker RMC confirmed yesterday that HeidelbergCement had made "an unsolicited approach" for its loss-making German division.

The cement maker RMC confirmed yesterday that HeidelbergCement had made "an unsolicited approach" for its loss-making German division.

The company said there was "no certainty that it will lead to a sale" and said the approach would be assessed "along with other options".

Last month, RMC announced an "unacceptable" half-year operating loss in Germany of £31.4m. The German operations have been affected over the past 18 months by continued weakness in the German economy, together with a 50 per cent drop in cement prices. The industry was also hit, last year, by an investigation by the German cartel office into volume-sharing.

RMC's German businesses have a current balance sheet value of £670m, although the group is expected to take a significant loss on any disposal of its business.

David Taylor, an analyst at Teather & Greenwood, said a sale to Heidelberg would represent a "good geographical fit", with RMC operations primarily in the north and Heidelberg principally operating in the south.

Shares in RMC closed up 30.5p at 626.5p.