UK's FTSE touches new record highs as CRH climbs

* FTSE 100 briefly hits new record highs

* CRH (NYSE: CRH - news) leads index on expectations of asset purchase

* TSB gains after agreeing to takeover by Banco Sabadell

By Atul Prakash

LONDON, March 20 (Reuters) - Britain's top share index touched new record highs on Friday, led by Irish cement firm CRH which rose on expectations of lucrative European asset purchases.

The blue-chip FTSE 100 index briefly hit a record high of 6,987.92 points before edging back a touch to trade up by 0.1 percent at 6,973.55 points by the middle of the trading session.

CRH advanced 4.7 percent, making it the best-performing stock in percentage terms on the FTSE 100, after its rivals Holcim (Other OTC: HCMLF - news) and Lafarge (Paris: FR0000120537 - news) salvaged a planned multi-billion-euro merger to create the world's biggest cement firm.

CRH has agreed to buy 6.5 billion euros worth of assets, which would give antitrust clearance for the Holcim/Lafarge deal. The new assets would transform CRH into the world's third biggest building materials supplier.

"The huge sums you speak of could be seen as a negative for the stock, but in this instance and especially given the positive outcome of the Lafarge-Holcim situation, the acquisitions will indeed strengthen CRH's position," said Accendo Markets' analyst Augustin Eden.

British bank TSB also rose 2.1 percent after TSB agreed to a 1.7 billion pounds takeover by Spanish lender Banco Sabadell in one of the biggest cross-border banking deals since the financial crisis of 2007-09.

"In all, the news looks good for both UK consumers and businesses, with the new TSB adding competitive vigour to the UK market place," said Hargreaves Lansdown Stockbrokers equity analyst Keith Bowman.

Lloyds, ordered to sell TSB by regulators as a condition of its 20-billion-pound bailout during the crisis, said it had agreed to sell a 9.99 percent stake to Sabadell and had also undertaken to sell its remaining 40.01 percent. (Additional reporting by Sudip Kar-Gupta; Editing by Toby Chopra)