British builders merchant sold by Wolseley to the French

By Roger Baird
Updated: 16:45 EDT, 25 July 2011

Wolseley has pulled out of a key business in the UK, selling builders merchant Build Center to French rival Saint Gobain.

Saint Gobain will also snap up Wolseley’s French plumbing and heating business Brossette in a combined deal worth £310million.

The move will see the French firm consolidate its hold in this market, after UK rival Travis Perkins dropped out of the race to buy Build Center’s 200 UK sites over the weekend.

Saint Gobain also owns 500 rival Jewson sites in the UK. Build Center made sales of £350million last year and supplies bricks, timber and other materials to the trade.

Wolseley chief executive Ian Meakins said: ‘These two sales are the last significant ones the group will make.’

He added: ‘These are decent businesses, but are nowhere near as strong as other brands we have in our portfolio. We want to concentrate on brands where we are number one or two in the market. Build Center is number four in its market and we calculated investment would be better spent on our bigger brands.’

Meakins said Wolseley (up 9p to £19.15) would look to boost organic sales from its other chains, such as Bathstore in the UK and Ferguson in the US.

But Meakins expects to see ‘tough markets’ in the US and UK over the coming year. The move draws a line under a turbulent period for Wolseley.

In the early part of the decade the firm expanded rapidly, buying rivals in the US and Europe, but sales slumped during the housing collapse following the financial crisis.

The firm launched a £1billion rescue rights issue in 2009, changed its senior management, and has sold off a number flagging units.