Cemex’s bid to acquire Australian rival Rinker Group Ltd. gained 50.3% shareholder approval on June 7, creating the world's largest building materials supplier. The Mexican cement giant’s $14.25-bilion purchase of Rinker equals a purchase price of $15.85 per share. The deal raises Cemex’s annual revenue by 27% to $23.2-billion, with a combined 67,000 employees in 50 countries.
S.A.B. de C.V.
Cemex’s $14.25-billion buy-out of rival Rinker Group Ltd. will create the world’s largest cement and building materials company with $23.2 billion in annual sales.
Cemex, however, must first sell 39 ready mix concrete, concrete block, and aggregate facilities in Florida and Arizona as per an anti-trust order from the U.S. Dept. of Justice. The assets are being valued between $300-million to $500-million by Goldman Sachs's JB Were.
Rinker has already warned that its fiscal 2008 earnings may drop by 10% because of a housing slump in the United States, where it makes 80% of its profit. The combined company will have 41% of its business in the U.S. and 24% in Mexico. Cemex has been paring debt in preparation for the Rinker purchase. Its net debt fell by more than half to $5.1 billion at the end of March, from a high of $10.4 billion in March 2005. Rinker has about $1 billion of debt.
Rinker is the largest acquisition for Cemex, which completed its biggest previous transaction in March 2005 when it paid $5.8 billion in cash and debt for RMC Group.