Tarmac's up for auction with a £2.9bn price tag

By This Is Money
Updated: 03:59 EDT, 3 August 2007

Mining giant Anglo American today put Tarmac on sale, sparking a $6bn (£2.9bn) auction.

Private equity groups as well as rival construction firms were alerted when Anglo confirmed it wanted to offload the road builder.

Analysts think Tarmac will attract bids of around $6bn and Anglo shares leapt 97p to 2866p, making it the largest riser in the FTSE 100 in early trading. Those thought to be interested in Tarmac include Orascon Construction Industries, Lafarge and Cemex. The company, which dates back more than 100 years, employs more than 12,500 people worldwide.

The decision to sell Tarmac comes as new Anglo chief executive Cynthia Carroll looks to focus on the company's core business of mining copper, platinum and gold. Anglo has not performed as well as many of its rivals in recent years and has already offloaded Mondi, its paper and packaging division, and sold its stake in AngloGold Ashanti, the South African gold business.

In a statement issued with the results, Carroll said: 'The group's safety performance for the first half of 2007 has been completely unacceptable. I have taken immediate action to address the safety situation, particularly in Anglo Platinum, and initiated a major new drive to improve safety.' On Monday, Ralph Havenstein said he was stepping down after four years as chief executive of the world's biggest platinum producer but it is widely believed he was fired. Five people died in accidents at one of the company's mines in June.

Anglo American today reported a 22% rise in first- half earnings to $3.1bn, broadly in line with City expectations. It also announced a $4bn share buyback programme.