The US$12,800m offer by Cemex for Rinker has been flatly rejected by the Australian-based group.
Cemex is obviously trying to take advantage of the weakness being seen in the US and New South Wales housing markets. Whether the US authorities would allow Cemex to substantially increase its position in certain markets, notably Florida, is questionable.
Rinker owns a quarter of Cement Australia, the largest Australian cement producer, and the other two shareholders, Holcim and Hanson, are unlikely to welcome a Mexican competitor as a shareholder.
Rinker is likely to emerge with a strong defence when it publishes its second quarter results, which will be weakened by the US housing downturn, shortly. A prolonged battle can be expected, with other prticipants possibly declaring their hands in the weeks ahead.