Financial Services Industry
Industry: Email Alert RSS FeedCemex Seeks Stable Cash Flow From Major UK Acquisition
Global Finance, Nov 2004
EUROPE
Cemex, the Mexican cement maker that has conquered global markets, agreed to buy British building materials firm RMC for $5.3 billion including debt.
The acquisition was the largest ever by a Mexican company and will double revenues at Cemex, the world's number three cement maker.
Lorenzo Zambrano, chairman and CEO of Cemex, says RMC will give the Mexican company access to developed markets with more-stable cash flows.
RMC, the world's biggest maker of ready-mixed concrete, is one of Europe's leading cement producers. It also is the market leader in aggregates such as sand and gravel.
Most PopularCBS MoneyWatch.com Articles
Cemex agreed to pay a premium of about 43% to RMC's stock price and is counting on the deal to generate about $200 million in annual synergies by 2007.
The acquisition will help it to compete with market leaders Lafarge of France and Holcini of Switzerland in the cement and concrete sector.
Cemex is funding the acquisition with debt, to be underwritten by Citigroup and Goldman Sachs, advisers to the Mexican firm on the RMC takeover. The financial package also will allow Cemex to refinance all of RMC's debt.
The transaction was the first major purchase by Cemex in three years, but its sixteenth since 1992. It will give Cemex a much larger presence in Europe, along with opportunities for growth in Eastern Europe.
Cemex already has operations in 30 countries on four continents. Britain and Germany account for about 45% of RMC's sales.
Zambrano says the RMC transaction will be immediately accretive to free cash flow and will broaden the company's global reach and product mix.
RMC is in the midst of a restructuring that has reduced its workforce to about 28,000 from 33,000 two years ago.
Brought to you by CBS MoneyWatch.com
- Best- and Worst-Paid College Degrees
- 6 Things You Should Never Do on Twitter or Facebook
- How Much Sleep Do You Really Need?
- 6 Big Myths about Gas Mileage
Most Recent Business Articles
- Multiple criteria evaluation and optimization of transportation systems
- Multi-criteria analysis procedure for sustainable mobility evaluation in urban areas
- A two-leveled multi-objective symbiotic evolutionary algorithm for the hub and spoke location problem
- Multi-criteria analysis for evaluating the impacts of intelligent speed adaptation
- The development of Taiwan arterial traffic-adaptive signal control system and its field test: a Taiwan experience
Most Recent Business Publications
Most Popular Business Articles
- 7 tips for effective listening: productive listening does not occur naturally. It requires hard work and practice - Back To Basics - effective listening is a crucial skill for internal auditors
- FAS 109: a primer for non-accountants - Financial Accounting Standards Board's "Statement 109: Accounting for Income Taxes"
- LIFO vs. FIFO: a return to the basics
- Design a commission plan that drives sales - Sales Commissions
- Too Young to Rent a Car? - 25-years-old the minimum age for car renting - Brief Article


