Hanson U.S. Reaches Asbestos Coverage Agreement with Insurers

Hanson PLC, an international building materials company, announced that one of its U.S. subsidiaries, responsible for approximately 20 percent of the group’s present asbestos costs, has reached a settlement with its insurers.

The settlement is effective from January 1, 2006 and resolves a number of issues relating to historic insurance policies which were issued prior to the mid 1980s and which provide insurance cover for a range of claims, including those relating to asbestos.

Under the settlement, the subsidiary will pay the first $35 million (approximately £20 million) of its future asbestos costs. Hanson estimates that this will be paid over approximately three years.

Thereafter, the subsidiary’s asbestos costs will be paid in full by the insurance carriers up to agreed and undisclosed, limits. These limits, assuming they are not used for non-asbestos claims, are expected to provide asbestos insurance cover for this subsidiary well beyond 2020.

Hanson has previously advised that the group’s total annual cost of asbestos, before tax, is estimated to average approximately $60 million per annum (approximately £34 million, or £21 million after tax) over the next eight years. Based on the above estimates, this settlement would reduce the net cost by 20 percent to $48 million per annum, after 2008.

Certain other US subsidiaries of Hanson PLC continue to litigate for asbestos coverage under their insurance policies, although resolution through litigation and/or negotiation may take a number of years to complete.

Hanson is the largest producer of crushed rock, sand and gravel and one of the largest producers of concrete products, clay bricks and ready-mixed concrete in the world. Its other principal products include asphalt and concrete roof tiles and its operations are in North America, the United Kingdon, Australia, Asia Pacific and Continental Europe. Hanson operates through six divisions: Hanson Aggregates North America, Hanson Building Products North America, Hanson Aggregates UK, Hanson Building Products UK, Hanson Australia & Asia Pacific and Hanson Continental Europe.