Lafarge of France Buys Remainder of Rival Blue Circle Industries

Lafarge SA of France announced on January 8, 2001 that it had reached an agreement with the Board of Directors of Blue Circle Industries PLC of the UK for the support of the acquisition by Lafarge of all the remaining outstanding shares of Blue Circle. The transaction, valued at approximately US$3.8 billion, is subject to the necessary financial arrangements and to regulatory approval. When completed, it will create the world’s largest cement maker. Blue Circle shareholders voted to approve the Scheme of Arrangement on February 19, 2001. The transaction is expected to be completed by the summer of 2001.

The friendly deal follows a hostile bid by Lafarge last year, which Blue Circle defeated. At that time, Lafarge acquired approximately 22.6 per cent of the shares of Blue Circle, which it continues to hold. Taking into account the shares already held by Lafarge and various transactions since last year’s bid, the operation represents a total investment of US$7.4 billion, unchanged from last year’s offer. In order to obtain regulatory approval, Lafarge expects that it may need to sell some cement operations and related assets in Canada and the US.

Stikeman Elliott acts for Lafarge on Canadian issues with a team led by Lawson A.W. Hunter, Q.C., and Susan M. Hutton, assisted by Danielle Royal. Blue Circle is represented in Canada by Davies Ward Phillips & Vineberg LLP, with a regulatory team led by Calvin S. Goldman, Q.C., and Lori A. Cornwall. Lafarge has retained Cleary, Gottlieb, Steen & Hamilton in the US, where George S. Cary, John S. Magney, Mark W. Nelson and David S. Snyder are handling US antitrust issues. On the US side for Blue Circle is King & Spalding, led by William Blumenthal, with assistance from Jeffrey S. Spigel.

Acting for Lafarge on UK and EU matters is Linklaters, led by David Barnes and Dominic Welham, assisted by Sarah Bibby on the corporate side, and Gavin Robert and Lucy Harrison on the competition side. Slaughter and May acts for Blue Circle in the UK and EU led by William Underhill and Laura Carstensen, with assistance from Marc Isreal. Kenneth Baseman of Microeconomic Consulting and Research Associates, Inc. (MiCRA) is consulting on the transaction on behalf of Lafarge. Phil Nelson of Economist Inc. is consulting for Blue Circle.