Plans by building materials group CRH to buy the Finnish group Addtek for an estimated €350 million (£276 million) have collapsed after Addtek's biggest shareholder pulled out of the deal. It has also emerged that CRH is the preferred bidder for Trzuskawica, Poland's largest producer of lime and calcium products and also the KKSM quarrying group in northern Poland.
The Finnish engineering group Partek owns 25.1 per cent of Addtek and said yesterday that talks to sell its stake to CRH had ended without agreement.
The collapse of the Addtek deal comes two weeks after CRH chief executive Mr Liam O'Mahony said the European Commission, which had vetoed the original takeover proposal on competition grounds, had indicated a basis on which the deal could go ahead. At the time, Mr O'Mahony said on that basis CRH would re-examine the Addtek takeover.
In a statement to The Irish Times yesterday, a CRH spokesman said: "Efforts to complete the deal and renegotiate to meet the objectives of all parties and the requirements of the EU have not succeeded."
But industry sources said the main sticking point which led to the collapse of the Addtek deal was money, and that CRH stuck to its long-standing policy not to pay more for assets than it thinks the assets are worth. Partek, for its part, is understood to have considered CRH's offer under the revised proposal as too low and walked away from the negotiations. Plans by CRH to buy Addtek first emerged earlier this year but last April the European Commission in effect blocked the proposed takeover because of competition implications in the pre-cast flooring industry in Finland and the Netherlands.
Addtek is one of the biggest precast flooring companies in Europe with sales last year of €542 million and pre-tax profits of €35 million. Addtek's Dutch operations accounted for €161 million of the sales while Finland accounted for €137 million.
In July, CRH said it was back in negotiations with Addtek on a revised formula which might meet EU requirements. At the time, industry sources felt CRH might have to agree to sell some of the Addtek businesses in the Netherlands and Finland to get over the competition difficulties.
But now, even though it seemed that agreement in principle had been reached with the EU on revised terms, disagreement over money has stymied the deal. If the deal had gone ahead at the suggested €350 million price, it would have been CRH's biggest acquisition this year.
Meanwhile, it has emerged that CRH's OKSM subsidiary in Poland has won exclusive negotiating rights to acquire the KKSM quarrying company. KKSM operates two dolomite mines, three sand and stone quarries and two marble-processing plants. CRH also has exclusive negotiating rights over Trzuskawica, Poland's largest producer of lime and calcium products. The Polish operations are likely to need heavy capital investment to be brought up to modern requirements.
