Making good on a hint of recent weeks of a possible bid for Hanson, HeidelbergCement is poised to solidify its position alongside global heavy building materials powerhouses Cemex S.A.B. de C.V., CRH Plc, Holcim Ltd., and Lafarge Group. The Hanson board announced May 14 its blessing of a $16 billion Heidelberg takeover offer. When measured in Hanson's New York Stock Exchange-traded American depositary receipts, the offer equates to about $109/ADR, nearly double their lowest trading point ($55.97, June 13) of the past year.

“HeidelbergCement and Hanson are a perfect fit, sharing the same enthusiasm for operational efficiency and focus on adding long-term value,” notes HeidelbergCement CEO Dr. Bernd Scheifele. “We believe the combined businesses will be better able to respond to the evolving needs of customers in the competitive and rapidly consolidating global building products industry.” He added that Hanson's London-based CEO Alan Murray has been asked to join the HeidelbergCement executive team, possibly charged with overseeing operations in North America and Australia — the latter country representing new turf for the buyer.

A Hanson takeover would afford HeidelbergCement a greater presence in North America, where Allentown, Pa., charter franchise Lehigh Cement anchors integrated U.S. and Canadian cement, ready mixed, concrete products and aggregates businesses. North American operations accounted for about 27% of the $12.5 billion Heidelberg reported in worldwide 2006 sales. The addition of Hanson's two domestic businesses, Aggregates and Building Products North America, whose 2006 sales totaled $4.0 billion, would especially bring Heidelberg's U.S. portfolio more in line with Cemex, CRH, Holcim and Lafarge. Each of Heidelberg's global peers derives anywhere from 23% to 32% of total revenue from U.S., Canadian and Mexican operations.

Heidelberg is effecting the offer through a new entity, Lehigh U.K., in accordance with British securities laws. Assuming regulatory approval in Europe and North America, the company anticipates closing the transaction in the third quarter.

CLIMATE CHANGE LEGISLATION COULD IMPACT HIGHWAY FUNDING

Proposed legislation aimed at curbing global climate change could reduce revenues for federal highway funding by resulting in higher fuel prices, greater inflation rates, and slower economic growth. So concludes a Portland Cement Association report assessing the economic impact of climate change proposals on the Highway Trust Fund.

Based on one of the more visible proposal — that of Senator Jeff Bingaman (D-N.M.) — PCA's assessment finds that real highway trust fund revenues would decline from $35.6 billion in 2005 to $11.8 billion by 2030. Cement consumption from this source of federal funding would decline from 17.3 million tons in 2010 to 10.5 million tons in 2030, estimates PCA's chief economist Ed Sullivan.

Several key findings related to climate change legislation contribute to the decline. According to Sullivan, higher energy costs and inflation rates will reduce overall economic growth and significantly erode the real-dollar buying power of the Highway Trust Fund. The combination of slower economic growth and higher fuel prices will reduce fuel consumption and the gas taxes that provide revenue for the Highway Trust Fund.

A three-page report summarizing key findings is available for free download at www.cement.org/exec/Key%20Findings%20050307.pdf.

PCA/CTL's Al Litvin, 1917-2007

Albert (Al) Litvin, retired materials engineer of CTL and PCA, passed away May 15, 2007, after a long battle with pancreatic cancer. He was 90 years old. From 1961 to 1986, while CTL was operating as a division of PCA, Litvin served successively as engineer, senior engineer, principal engineer, and manager of the construction methods section. Litvin officially retired from CTL in 1987 but continued to work as a consultant until a few years ago.

Litvin earned a B.S. in Civil Engineering from the University of Illinois, Urbana in 1938 and did graduate studies at George Washington University, Washington, D.C. From 1941-1951 he worked for the National Bureau of Standards in Washington, D.C., where he was a materials engineer in the concreting materials section. From 1951 to 1961 he served as supervisor of the masonry materials section at IIT Research Institute, Chicago.

CEMENT TOTALS

Total shipments of portland and blended cement in the United States and Puerto Rico were about 6.7 million mt in February 2007, according to the U.S. Geological Survey. This was almost 17.7% lower compared with shipments for February 2006. Shipment year-to-date totaled about 13.8 million mt, down by 18.2% compared with those of the same period in 2006.

Clinker production totaled 5.8 million mt in February 2007, a 7.2% decrease compared with 2006. Cumulative shipments for 2007 through February was 12.5 million mt, down 5.7% from 2006.

Masonry cement shipments were 290,000 mt in February 2007 were 28.8% lower compared with shipments in February 2006. Year-to-date shipments were 630,000 mt, down 24.5% from the same period in 2006.

FEBRUARY 2007