More on the Lemona bid

More on the Lemona bid
Published: 07 December 2005

FCC (Fomento de Construcciones y Contratas), the Spanish construction and services group, has gone against the trend in the sector by focusing on the Spanish market with its 100 per cent takeover of cement company Cementos Lemona. FCC already controlled a leading 30.72 per cent stake in the company and has now protected this interest from hostile bids by rival sector members. Cementos Lemona was one of the last opportunities for growth in the national cement market, which now has a very narrow margin for mergers and acquisitions. Other major groups in the sector are already focusing their attention on foreign markets.

Cementos Portland, FCC’s cement arm, has benefited from the takeover to become Spain’s number-two cement group, behind Mexico’s Cemex. Portland and Cemex are this year set to see growth of 10 per cent in joint earnings, to around Euro 1.1bn, and in EBITDA, to Euro 350m.

Portland, which should benefit from annual synergies with Lemona of Euro 4m, is now studying purchases in Latin America, the US and eastern Europe, with a planned investment of Euro 900m. The Lemona takeover has raised the company’s net debt to Euro 465.5m, with a debt to equity ratio of 47 per cent.