While CRH is spending around €170m, or some US$250m on buying the US assets that Cemex has to sell as a direct result of the Rinker acquisition, none of the other deals discussed, neither in the Pacific north-west and other parts of the western United States, nor the three US and Spanish cement plants or the Austrian and Hungarian operations are going ahead. What CRH is buying from Cemex consists of 26 batching plants in Florida and six concrete block plants there as well as two quarries and six batching plants in Arizona, essentially in the Tucson area.
The two parties have failed to agree valuations of the businesses that Cemex is not forced to sell and that could have raised up to €3,000m for the Mexican group. Cemex will, however, raise US$227m and contribute assets worth a further US$150m through a deal with the privately owned Ready Mix USA, with which it already has a joint venture. This joint venture, which is 50.01% controlled by Ready Mix USA will purchase former Rinker assets consisting of, among other things, twelve quarries and eleven batching plants in Tennessee, three quarries in Georgia and one quarry in Virginia. Between them, these businesses contributed an EBITDA of around US$47m in 2006.
By not pursuing the larger deal with Cemex, it increases the possibility of CRH bidding for Tarmac, something it would have found almost impossible if it had just spent close to a further €3,000m on a deal with Cemex. The question remains, whether Cemex will still be looking to raise funds by selling some of these businesses to other parties.