Sean Flanagan will lead the integration and development of Cementation in the group

After months of due diligence and negotiation, the transaction has finally been concluded at 759.63 cents per Cementation share, a 69% premium on the ruling price when the parties announced the transaction in November 2003.

In line with the requirements of the JSE Securities Exchange South Africa, the next step will be for Murray & Roberts to extend the offer to the remaining 20.87% of shareholders.

Murray & Roberts CE Brian Bruce has confirmed that the group intends to apply for a de-listing of Cementation from the JSE once the criteria for such a move have been achieved. “Thereafter, we will commence the consolidation of our various mining contracting assets,” he says.
Murray & Roberts’ strategy is to offer an integrated services package to local and global resources clients in the construction and development of their underground mining facilities.

Group FD Roger Rees has led the due diligence and transaction process over the past eight months. He says: “In a separate but linked transaction, Murray & Roberts International has acquired 100% of the Cementation mining business in Canada. The price is CAD 10 million (R46 million) including loan accounts.”

He adds that the Cementation assets in Australia have been excluded from the transaction, but that appropriate rights to the Cementation name in that market have been secured. Brian has announced that Murray & Roberts executive director Sean Flanagan will lead the integration and development of Cementation in the group. The Canadian business will report to the United Kingdom through international executive director Peter Adams and the Australian market will continue to be served through the international arm of Murray & Roberts RUC.
Earlier this year the Competition Tribunal unconditionally approved the transaction.

The Cementation businesses were part of Kvaerner Construction (UK), which Swedish company Skanska acquired in 2000. They include global mine design, mine development, mine engineering and mine contracting services, as well as contract mining operations. In the year to December 2002, the total net revenue of the Cementation Africa businesses was the equivalent of R1.5 billion, with an operating profit of R44 million.

“Clients in the global mining resources sector are looking to their contractors for higher levels of services integration in the development of their underground assets and activities”, says Brian.

“The change in risk allocation associated with these trends demands that we pursue a strategy of greater critical mass and a more effective
global presence.”