Lafarge sells a majority stake in its speciality products division

27 November 2000

Lafarge has signed an agreement with the investment funds CVC Capital Partners and Advent International for the sale of a majority of stake in its Specialty Products Division. Under the terms of this agreement, Lafarge will take one third of the capital of the newly created company, which will become operational in January 2001. Continuity will be ensured by the current management team.

The agreement concerns all Specialty Products Division businesses with the exception of Road Marking, the European operations of which were recently sold to the Burelle group, and Lime, part of which in the United States is operated as a joint venture with Carmeuse.

The transaction values those businesses involved in the disposal at 890 million euros. Lafarge will purchase a 33.34% holding in the capital of the newly created company. Combining this sale with that of the European Road Marking operations, this corresponds to a divestment of approximately 850 million euros for Lafarge.

This agreement has been concluded in the context of a one billion euros divestment package announced in May of this year, the bulk of which was to be carried out by the end of 2000. The purpose is to restore the financial flexibility that the Lafarge Group requires in order to pursue the development of its principal worldwide businesses. The sale is subject to approval from the appropriate European authorities and the finalization of financial arrangements by the investment funds.

Lafarge's Specialty Products Division, which has made a strong return to profitability in the past five years, recorded sales of 1.2 billion euros in 1999. 930 million euros of this was generated by the businesses involved in this operation: Aluminates, Mortars, Admixtures, Refractories and Paints. These businesses employ 4,500 people, and operate approximately 50 production facilities in France and numerous countries around the world.

With 71,000 employees in 70 countries, Lafarge recorded sales of 10.5 billion euros in 1999. The Group is world leader in construction materials, and its principal industries consist of Cement, Aggregates & Concrete, Roofing and Gypsum.

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