Mexico-based CEMEX S.A.B. de C.V. would become the world's largest aggregate producer if shareholders of Australia-based Rinker Group Ltd. approve a $12.8-billion hostile bid that CEMEX lodged on Oct. 27. Rinker primarily serves the U.S. "sunbelt," including California, Arizona, Florida and Texas. These states have "the highest population and GDP growth rates as well as the strongest long-term construction projects," says CEMEX Chairman Lorenzo H. Zambrano. The cash offer comes at a 26.2% premium over Rinker's three-month average stock price and would give CEMEX $130 million in annual pre-tax savings. Rinker's board of directors says the deal "materially undervalues" its company and advises shareholders to "take no action," says Chairman John Morschel. In a conference call to investors, Zambrano says he is "ready" to discuss friendly terms but admits to being "worried" about a U.S. housing slowdown. "I'm confident those are manageable risks," he adds. Cement prices will post double-digit gains this year, says the Bureau of Labor Statistics.
CEMEX Bids To Buy Rinker, Deal Would Create Aggregate Giant
November 6, 2006