Quinn Building Products and rival Lagan Cement yesterday signalled that they may join forces next year.

Quinn, in which the State indirectly holds a 24.9 per cent stake through the former Anglo Irish Bank, and Lagan said yesterday that they have signed a memo of understanding that may lead to a joint venture.

Quinn Manufacturing Group chief executive Paul O’Brien and his opposite number, Jude Lagan, said that the idea is to create a “sustainable” independent Irish cement producer.

However, the scale of both operations means that any deal will be referred to the Competition Authority.