Blue Circle Industries PLC, the UK cement group that fought off a hostile takeover approach from France's Lafarge SA earlier this month, confirmed May 22 it has held new preliminary merger talks with Southdown Inc., the second-largest cement maker in the U.S.
A merger between Blue Circle and Southdown, whose previous merger talks failed last year, would create a company with a market value of 5 billion sterling (US$7.5 billion).
The UK company stressed it is "much too early" to say whether Southdown offers an attractive opportunity for Blue Circle. The company made the statement in response to a report in a UK newspaper,The Sunday Telegraph, that it was considering reopening merger talks with Southdown.
Last year's negotiations between Blue Circle and Southdown, which was at the time valued at $2.2 billion, are believed to have broken down over the price the Southdown management said it would recommend to its shareholders.
Blue Circle is now understood to be looking for a deal that would put it beyond reach of Lafarge once and for all. The French building products group withdrew its offer after it failed to win approval from Blue Circle shareholders for its hostile 3.6 billion-sterling offer.
