Lagan and Quinn Building Products have walked away from a deal involving a possible merger after just under two months of talks.
Last December, the pair announced they had signed a memo of understanding that could lead to a joint venture.
Quinn Manufacturing Group chief executive Paul O’Brien and his opposite number, Jude Lagan, said at the time that the idea was to create a “sustainable” independent Irish cement producer.
However, they issued a joint statement yesterday saying: “Discussions have now concluded and both companies have decided not to progress further with the proposed joint venture.”
Neither side would comment any further, but it is understood they were unable to agree terms under which both operations would have been able to join forces. A deal would have most likely been a merger of the two groups’ cement divisions , creating a business with manufacturing in Ireland and Britain and a storage terminal in the Netherlands that provides a base for exporting the product into Europe.
Transaction
Any deal between the two would have been referred to the Competition Authority and the sides could have faced a six-month wait before finding out if the transaction was going to be cleared.
Quinn Building Products, which owns the group’s cement business, will continue with plans to spend €15 million on its plant at Ballyconnell, Co Cavan.
The group plans to update the factory and switch from burning coal to solid recovered fuel – which comes from recycling waste – which is common practice in its industry.
Quinn Building Products is part of the Quinn Group. Its former creditors, mainly banks and hedge funds, now own 75.1 per cent of the company; the balance is held by the State-owned Irish Bank Resolution Corporation (IBRC).
The Oireachtas placed the IBRC in special liquidation last week. The liquidators, Kieran Wallace and Eamonn Richardson of KPMG, did not comment on either the talks with Lagan or their failure. Quinn is also involved in other building material manufacturing as well as glass and radiators.
Lagan is a long-time rival of Quinn Cement. Owned by the Lagan family, its main Irish operation is in Kinnegad, Co Westmeath. The company expanded its operations into the British market in 2008 and two years later, bought the Zeeland Cement terminal in the Netherlands, which opened up markets in western Europe to the business.
Turnover
The group has a turnover in the region of €450 million a year.
The group’s chief executive, Kevin Lagan, recently received a bullet and a threatening note in the post.
The threat was believed to have been linked to the talks between the two businesses.
