Cemex seals 15.3bn deal to buy Rinker

Cemex seals 15.3bn deal to buy Rinker
Published: 10 April 2007

Cemex SA confirmed it has signed a deal to buy Australian building materials firm Rinker Group in a deal valued at US$15.3bn.  
 
"The value of the total transaction, including Rinker’s debt, is about US$15.3bn," Cemex said in a statement late Monday.  
 
In Australia Rinker said it had agreed to the bid, revised upward 22 per cent from Cemex’s first offer.  
 
Rinker put the deal’s value at US$14.2bn, not including its debt.  
 
The takeover offers Rinker shareholders US$15.85/share, US$2.85 above the initial offer of US$13, which was rejected earlier as opportunistic and significantly undervaluing the company.  
 
The final offer is 45 percent higher than the closing price of Rinker on October 27, when the original bid was made.  

"This is a good transaction for the stakeholders of both companies," said Lorenzo Zambrano, Cemex chief executive and chairman of the board.  
 
"The combination of Cemex and Rinker will create value for shareholders as well as customers, particularly in key growth regions of the United States," Zambrano said in the statement.  
 
Rinker chairman John Morschel said the main aim of the deal was to maximise value for shareholders, noting that the impact of the downturn in the US housing market over the current financial year is difficult to predict.  
 
"In light of the above, and following evaluation of the available alternatives, including relevant regulatory, timing and other execution risks, directors concluded that in the absence of a superior proposal, the higher Cemex cash offer represents the best risk-adjusted return for shareholders," he said. 
 
Cemex, which wants to acquire Rinker to expand its presence in the United States where the Australian company earns more than 80 per cent of its income, said it has also agreed to waive all conditions to the bid, except the 90 per cent minimum acceptance condition.  
 
The Mexican group said that if the required level of acceptances was not reached, the offer would lapse.