The French cement group Lafarge is making a friendly bid of euro 7.4 billion ($7.05 billion), comprising 3.8 billion euros plus debt, for Blue Circle of Britain, it said today.
Lafarge said that the takeover would make it the world's biggest cement producer in the world, with capacity to make about 150 million tons per year.
The price of shares in Lafarge rose by 4.32 per cent to euro 95.45.
The Blue Circle board had approved the terms and would recommend them to shareholders and the deal should be completed during the summer.
Lafarge president and chief executive officer Mr Bertrand Collomb said the offer was for 100 per cent of Blue Circle.
The cost of the operation would be met by an increase of capital by Lafarge with preferential subscription rights of about euro 1 billion to be launched this month and by an increase of debt of euro 2.8 billion.
Mr Collomb told a press conference the offer "is altogether reasonable" and the cost was unchanged from that of an earlier offer made on April 19th 2000.
Lafarge planned to dispose of assets over 18 months, concerning notably "non-strategic" interests held by Blue Circle in North America and property in Britain.
The offer concerns 77.4 per cent of Blue Circle which Lafarge does not already own at a price of 495 pence per share amounting to euro 3.8 billion.
But Lafarge is also assuming Blue Circle debt: thus the total value of the offer is euro 7.4 billion.
Lafarge said it expected to generate savings through combining the two operations of about 100 billion euros per year within two years and that the effect on profits before goodwill from 2002 would be "very positive".
In 1999 Lafarge - which employs 56,000 people in 70 countries - achieved sales of euro 10.5 billion.
AFP