Redland sells three Steetley businesses

REDLAND, the building materials group, yesterday rang in the new year with the announcement of a series of deals that take it further into Europe and help it to fulfil conditions imposed on its acquisition of Steetley.

Three Steetley offshoots - clay tiles, refractories and a French civil engineering company - have been sold, raising about pounds 33.4m.

The clay tiles business has been bought by the Belgian group SA Eternit for pounds 19m - pounds 2m more than its net assets. It was one of the businesses Redland undertook to sell to avoid the takeover being referred to the Monopolies and Mergers Commission.

It is still looking for a buyer for the two brick plants in south-east England which, under the terms of the undertaking, must be sold by September.

The refractories business, which makes bricks for kilns for the steel industry, was sold to J E Baker, the US company, for pounds 14.3m, although Redland will continue to supply it with raw materials. Its pre-tax profits in 1992 are estimated at pounds 1.4m.

Jean Bernard, the French company that lost pounds 1.8m last year, was sold for a nominal sum.

The group has also raised pounds 8.4m through the disposal of a US joint venture and a Texan quarry.

Gerald Corbett, Redland's finance director, said the sales completed the first phase of the programme of selling some of Steetley's interests. Other disposals were likely but some would be retained until prices improved.

He added that the group was likely to be cash-neutral this year before disposal proceeds. Analysts said that should ease pressure on the 1993 dividend, which some had expected to be cut, and the shares gained 16p to 423p.

The group also announced a series of acquisitions and joint ventures in Germany, France, Belgium and the Netherlands.

Teewen, its brick business, has established a joint venture with Koramic, the Belgian brick maker. The deal will give the combined company 30 per cent of the Dutch brick market as well as interests in Germany. Redland will receive pounds 17.3m on completion.

It has also raised its stake in Coverland, the French roof tile company, from 43 to 67 per cent by acquiring a further 14 per cent of the shares from its joint venture partner, St Gobain. It has an option to buy the remaining shares at pounds 24m between 1995 and 1998.

Under the deal the two partners subscribed pounds 36m each to redeem the bulk of Coverland's debt, and Redland has paid an extra pounds 12m to acquire St Gobain's shares.

Braas, Redland's brick business, has acquired a Danish clay tile business for pounds 10.6m.