05/12/05 Buyers emerge for parts of restructured Brambles (By : Adam Durchslag)

BRAMBLES Industries, an Anglo-Australian logistics giant, has decided there is more sunshine in the land down under and is making Sydney its primary listing. So its chief executive, David Turner, announced last week to the market. The company is also selling assets estimated to be worth more than £1bn (E1.46bn, $1.71bn).

The result will be a newly restructured company – combining Brambles plc in the UK with Brambles Ltd in Australia – which will have an increased index weighting on the Australian stock exchange. The process is expected to take no more than 12 months.

But the company, which is the largest supplier of pallets in the world, is not deserting the UK. It will continue to retain a secondary listing in London.

There will no longer be a need to have two corporate head offices and savings are expected to be £20m a year.

Brambles has also decided to sell businesses that contribute about 28% of its operating profit and 40% of its sales. But the plan for a £1.2bn share buy-back should help maintain the company’s earnings per share.

Brambles wants to focus on two main areas for growth, the profitable CHEP pallet division, which will account for 85% of the new company’s profits, and Recall, which manages documents in 23 countries. With M&A firmly back in vogue, pushing stock markets higher, it is a good time to sell assets.

The businesses it intends to divest include Cleanaway (UK and Australia), the waste-disposal unit, worth about £670m; Industrial Services, a company mainly geared toward the steel industry and valued at £410m; and Interlake, a storage rack supplier worth £65m.

New Zealand’s Waste Management is already reported to be interested in buying Cleanaway Australia, while the UK’s Shanks Group has indicated it may be interested in parts of Cleanaway.