CRH buying Cemex cement assets
By Our Corporate Bureau | 18 Sep 2007
Ireland''s CRH plc, which is the second biggest producer of building materials in the world, is readying to acquire the US-based concrete plants, pipe-making unit and cement division of Cemex of Mexico.
The reason why Cemex, North America''s biggest cement maker, is putting 39 concrete and aggregate plants in Florida and Arizona on the block is it needs to do this to gain US justice department approval for its $14.2 billion acquisition of Rinker Group Ltd., Australia''s largest building products manufacturer. Cemex wants to realise $4.5 billion from these and other assets.
The Dublin-based CRH, which is also looking at Cemex units in Utah, Wyoming, Nebraska, New Mexico and Texas in the US and in Europe, may have to borrow funds for the purchase. While the global credit crunch is expected to make borrowing expensive, it may well pay off, analysts believe, given the strategic and operational fit of the units being considered for purchase and the timing of the acquisition.
If it succeeds, this will be CRH''s biggest acquisition. Its previous highest was the purchase of Ashland Inc.''s Georgia-based highway unit for $1.3 billion. The Irish company has spent some $17 billion on acquisitions in the past 10 years.
Cemex
has no alternative but to sell, because of the Rinker deal. The sale of assets
worth around $4.5 billion will also substantially reduce the Mexican company''s
debt and its exposure to a currently weak US market.
