Mitsubishi Chemical exits BGC competition

Perth-based BGC has a cement grinding terminal, quarries and concrete works.

Japanese suitor Mitsubishi Chemical is understood to have left the contest for private Perth building materials empire BGC.

It was thought to be interested in the assets of the family of the late Perth billionaire Len Buckeridge, to protect is clinker supply arrangements.

Sources believe another Asian suitor remains in the mix.

Still in the contest are CRH, which owns Australian building materials company AdBri; Seven Group’s building materials supplier Boral; and Cement Australia, a joint venture between Holcim and Heidelberg.

They face Australian Competition and Consumer Commission challenges in the auction, as all have strong market concentration in Australia.

BGC, based in Perth, has a cement grinding terminal, quarries and concrete works, and generates between $60m and $80m of annual earnings.

Macquarie Capital is working on the sale. The business is expected to sell for between $600m and $800m.

BGC was up for sale in 2022, but buyers were unwilling to take on the family-owned company’s loss-making home-building unit, which has since been hived off.

Analysts say building materials are attractive because of the shortage of housing. The sale comes in a period of industry consolidation, with CRH buying AdBri in the past year and CSR being bought by Saint Gorbain.

Other building materials businesses that have been sold in Australia include the assets of windows and doors manufacturer Jel-wen, while there are expectations that Fletcher Building will put more assets on the market.