Market Overview

CEMEX, Holcim Agree to Series of Transactions in Europe


CEMEX (NYSE: CX) announced today that it has reached an agreement with Holcim to conduct a series of transactions that will improve CEMEX's strategic footprint in Europe.

CEMEX will acquire all of Holcim's assets in the Czech Republic, which include one cement plant (cement capacity of 1.1 million tons, clinker capacity of 0.9 million tons), four aggregates quarries and 17 ready-mix plants. The Czech Republic is a market with a strong economy and solid prospects and we expect that acquiring these assets should improve CEMEX's operations in the country and in Central Europe.

CEMEX will divest its assets in the western part of Germany to Holcim, which include one cement plant and two grinding mills (total cement capacity of 2.5 million tons, clinker capacity of 0.9 million tons), one slag granulator, 22 aggregates quarries and 79 ready-mix plants. The German market is an attractive one and CEMEX will still be present in the eastern, northern and southern part of the country with an important footprint. In Spain, CEMEX and Holcim will combine all their cement, ready-mix and aggregates operations. CEMEX will have a 75% controlling interest over the combined operational assets in this country. This transaction will allow CEMEX to better serve the market, which should translate into higher value creation in that country.

As part of these transactions, Holcim will pay CEMEX €70 million Euros in cash. Additionally, the transactions are expected to generate synergies that will result in a recurring improvement in CEMEX's EBITDA of about US$20 million to US$30 million, beginning to be realized in 2014.

“When finalized, this will be an important strategic step that should allow CEMEX to improve its footprint in Europe, and it will consolidate our portfolio in the continent,” said Lorenzo H. Zambrano, Chairman and CEO of CEMEX.

These transactions are not final as they are subject to the fulfillment of various conditions precedent, mainly confirmatory due diligence, approvals from competition authorities, and from creditors under the Facilities Agreement, among others. We currently expect to finalize these transactions during the fourth quarter of 2013.

Posted-In: News M&A Global


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