Cemex sells United States assets - as condition of Rinker takeover

Cemex sells United States assets - as condition of Rinker takeover
Published: 05 December 2007

Mexico-based Cemex, which owns 20 per cent of Jamaica’s Carib Cement Company (CCC), has sold a raft of pre-mixed concrete and aggregate facilities in Florida and Arizona to Ireland’s CRH plc, as part of efforts to clear anti-trust hurdles to its US$15.3bn acquisition of the Australian building material outfits, Rinker Group.

CRH Plc will pay approximately US$250mfor the 39 facilities, which Cemex said it would use to write-down debts.

Both companies had previously announced that they had terminated negotiations for CRH to acquire other former Rinker assets because of disagreement over price.

Some of these assets will now go to Ready Mix USA - a private ready-mix concrete company with operations in the US southeast in which Cemex owns 49.99 per cent - in a deal valued at US$377m.
Cemex will be paid US$277m in cash and will contribute another US$150m in assets to the joint venture, in which it has been a partner since 2005.

That US$150 million asset value by Cemex will be matched by a cash injection by Ready Mix USA, which will continue to manage the operation.

The divestment of Cemex’s ready-mix and aggregate operations in Florida and Arizona was a condition for American regulatory approval for Cemex’s hostile acquisition of Rinker in July.

Market areas
The Florida operations being sold-off comprise 26 ready-mix concrete plants and six block plants.
The ready-mix concrete business operates in five market areas - Tampa, Southwest Florida, Orlando, Jacksonville and the Florida Panhandle. The block business operates primarily in the Tampa/St. Petersburg and Fort Myers/Naples areas.

In Arizona, the operations comprise two quarries and five ready-mix concrete locations, principally in the Tucson area.

In addition to its stake in Carib Cement, Cemex’s assets in Jamaica include Rugby Lime, which produced calcined lime, used in the refining of bauxite to alumina.

It acquired the first 65 per cent of Rugby Lime when it purchased Rugby Group, a British building material conglomerate, and then this year bought the holdings of Rugby’s Jamaican partners.

Cemex’s acquisition of Rinker propelled it to the number three spot among the world’s largest cement manufacturers, with operations in 50 countries, 67,000 employees and annual revenues of US$23.2bn.