CEMEX to sell Australian operations to Holcim Group

15 June 2009

The world's third-largest cement maker, Mexico's Cemex S A B de C V  today that it has reached an agreement to sell its Australian operations to Switzerland-based building materials group Holcim for approximately A$2.02 billion, subject to fulfilment of closing conditions in six months.

The sale also includes Cemex Australia's 25-per cent stake in Cement Australia, in which Holcim already owns a 50-per cent stake.

Cemex expects to improve its financial flexibility and reduce its $14.5-billion debt. The deal will will enable Cemex to implement $900 million in recurrent cost savings; rationalisation of capital expenditures; and reduce its total debt, acquired from the $15.3-billion Rinker acquisition.

For Holcim, which said it would finance the deal entirely from a proposed rights issue of $1.86 billion, the acquisition comes at an extrremely attractive valuation given Cemex's large debt load that has to be paid by the end of 2011.

Hplcim would gain 384 facilities owned by Cemex Australia, one of the leading producers of aggregates, ready-mix concrete and concrete pipe in Australia, will divest its 249 ready-mix concrete plants, 83 aggregates quarries and 16 concrete pipe and products plants - a total of 348 facilities located throughout Australia. Cemex in 2008 reached sales of approximately A$1.86 billion and an EBITDA of approximately A$313 million. The company currently employs approximately 2,800 employees.

In addition, Hplcim would gain Cement Australia's annual production capacity of 5.1 million tonnes of cement, including from an ongoing expansion, from four cement plants and one grinding plant as well as several terminals and distribution centers along the east coast of Australia and in Tasmania. In 2008, Cement Australia posted sales of approximately A$995 million and an EBITDA of approximately AUD 196 million.