CSZ Csr

RNS Number:2653E
Hanson PLC
26 November 2002


November 26, 2002

Hanson PLC announces agreement to merge  Australian cement interest


Hanson PLC, the international building materials company, announced today that
Australian Cement Holdings Pty Ltd ("ACH"), a 50/50 joint venture between Hanson
Australia Pty Ltd and CSR Ltd, will merge with Queensland Cement Ltd ("QCL"), a
wholly owned subsidiary of Holcim Ltd.


The merged business will be the leading cement manufacturer in Australia with
over 3 million tonnes of cement production capacity in three main plants serving
eastern Australia, which represents 80% of the country's population. Hanson and
CSR will each hold a 25% interest in the merged entity, with Holcim holding 50%.


ACH and QCL have complementary positions in the Australian cement market. The
QCL plant in Gladstone primarily supplies Queensland and export cement markets,
while ACH primarily supplies markets in New South Wales, Victoria and Tasmania.
The merged entity will be well placed to compete more effectively in the larger
New South Wales and Victorian markets.


The merger will also generate overhead and logistics synergies and will delay
the capex required by ACH to increase its production capacity in New South
Wales.


Commenting on the transaction, Leslie Cadzow, chief executive of Hanson
Australia, said:  "Hanson looks forward to working with CSR and Holcim to
maximise returns from the merged entity. Long-term supply agreements with CSR
and Hanson will improve stability for the merged business, while providing added
security of supply for our respective downstream ready-mixed concrete
operations."


Alan Murray, chief executive of Hanson PLC, added:  "Our approach to cement in
each of our regions is influenced by the dynamics of the market.  As a result of
this merger, Hanson Australia will have a 25% interest in a significantly larger
and more efficient company which will help maximise profitability."


The merger is expected to be completed in the first quarter of 2003, subject to
final documentation and due diligence and to regulatory approval by the
Australian Consumer and Competition Authority.


Further information on Hanson is available at www.hansonplc.com


Inquires:          Justin Read                         Leslie Cadzow
                   Hanson PLC                          Hanson Australia Pty Ltd
                   +44 (0)20 7245 1245                 +61 (0)2 93234000


Notes:

1.         Hanson is the largest producer of aggregates and concrete pipe &
products in the world and is the third largest producer of ready-mixed concrete.
Its other principal product is bricks and its operations are in North America,
the UK, continental Europe, Asia Pacific and Australia.

2.         Hanson Australia is one of Australia's leading suppliers of
construction materials.  Its core activities are in quarry products, cement,
ready-mixed concrete and concrete products.

3.         Full text of today's ACH/QCL press release:


          Proposed Merger of Australian Cement and Queensland Cement


CSR Limited (CSR), Hanson PLC (Hanson) and Holcim Ltd (Holcim) today announced
that they have agreed to merge their Australian cement businesses to form the
leading cement supplier in Australia. The proposed merger is subject to final
documentation being agreed, regulatory approval and final due diligence.


The proposed merger will comprise CSR and Hanson's Australian Cement joint
venture (ACH) and Holcim's wholly-owned Queensland Cement (QCL), both of which
are major suppliers of cement and related cementitious materials in Australia.
The proposed merger will include all of QCL and ACH subsidiaries and joint
ventures. It is envisaged that QCL's concrete and aggregates business will be
on-sold to CSR and Hanson.


The merged entity will produce over 3 million tonnes of cement per annum from
three main plants: Gladstone (Qld), Kandos (NSW) and Railton (Tas).  These
plants will serve customers through an extensive network of terminals
predominantly in Queensland, NSW, Victoria and Tasmania. Gladstone and Railton
are already acknowledged as being the two lowest cost cement plants in Australia
and Kandos provides unique low cost access to the western NSW market. The plan
for the merged entity does not include any plant closures.


Background


Following a detailed review of the opportunities to improve overall supply chain
logistics, achieve cost savings and enhance the competitive position of the
merged entity, the boards of CSR, Hanson and Holcim concluded that a merger
would be significantly value-enhancing for their respective shareholders, and
would favorably position the merged business for long term growth.  In
particular, the parties concluded that a larger and more geographically diverse
group of productive assets and logistics facilities would significantly enhance
the flexibility of the merged business in meeting anticipated growth in demand
and in serving customers throughout Eastern Australia.


ACH and QCL have complementary positions in the Australian cement market.  The
QCL plant in Gladstone primarily supplies the Queensland and export markets
while ACH plants primarily supply markets in NSW, Victoria and Tasmania.


Merger Terms


Under the terms of the merger, Holcim will own 50% of the merged business and
CSR and Hanson will each own 25%. The composition of the merged entity board
will reflect the shareholding structure.



The merged business will enter into long-term supply agreements with CSR and
Hanson, providing added security of supply for CSR and Hanson's downstream
concrete operations and improved stability for the merged businesses.


The business will be managed independently of CSR, Hanson and Holcim, but will
draw on the technical expertise and resources of the parent companies where
appropriate.


Benefits from the proposed merger


CSR, Hanson and Holcim believe the implementation of the proposed merger will
result in significant benefits. These benefits are expected to include:

*         Improved overall supply chain economics through enhanced utilisation
of surplus capacity at Holcim's Queensland manufacturing assets;

*         An enhanced ability to compete in NSW, Victoria and other states due
to the available capacity of QCL and the combined logistics infrastructure;

*         Combination of the skills and expertise of the ACH and QCL people to
supply high quality products and valuable services to customers;

*         Cost savings associated mainly with the rationalisation of
administration and corporate overheads;

*         Increased stability and improved efficiencies resulting from long
term supply agreements with CSR and Hanson; and

*         Opportunities to improve overall efficiencies through optimisation
of the enlarged network of productive assets and transport and logistics
facilities in the Australian market.


Alec Brennan, Chairman of ACH, said: "This proposal is a sensible and logical
step with benefits for all parties.  CSR and Hanson, as joint venturers in ACH,
look forward to working with Holcim in deriving the anticipated benefits."


Jerry Maycock, Chairman of QCL and Senior Vice President of Holcim (South East
Asia), said: "Entering the joint venture will convert a proportion of lower
value export focused production to higher value domestic cement sales, and
brings with it secure, long term supply agreements with major customers."


Timetable/Next Steps


Subject to the final documentation being agreed, regulatory approval by the ACCC
and satisfactory completion of due diligence, the merger is expected to be
completed early in 2003.


The advisor and facilitator to the parties is Gresham Partners.


For further information contact:


Alec Brennan                            Jerry Maycock
Chairman ACH                            Chairman QCL
Deputy Managing Director CSR            Senior Vice President (S.E.Asia) Holcim
Phone 02 9235 8099                      Phone 07 3335 3010


ABOUT QCL


Current Ownership

*         100% Owned by Holcim


Key Figures

*         Sales: $331m

*         Tonnage: 1.64m t (production cement equivalent)

*         Employees: 800 (including % share of associates)



Key Operations

*         Gladstone cement plant (Qld)

*         Bulwer Island (clinker grinding) (Qld)

*         Shipping assets

*         Flyash business

*         Excel premix concrete and aggregates

*         Pacific Lime

*         50% of ASMS (slag)

*         50% of QCD (bagged product)

*         50% of MPA (flyash services)


ABOUT ACH


Current Ownership

*         50% owned by CSR

*         50% owned by Hanson


Key Figures

*         Sales: $384m

*         Tonnage: 1.67m t (production cement equivalent)

*         Employees: 590


Key Operations

*         Railton cement plant (Tas)

*         Kandos cement plant (NSW)

*         Shipping assets

*         Distribution terminals

*         Flyash business

*         82% of Melcann bagged products (Melcann owns 50% of QCD)

*         Cornwall Coal (Tas)

*         Besser (Tas)


                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

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