CEMEX to acquire RMC for £2.3 billion
RMC Group, the world’s largest manufacturers of ready-mixed concrete, have accepted a £2.3 billion takeover bid from CEMEX of Mexico. The moves follows a decade of expansion that has seen CEMEX grow from a domestic player into the world’s third largest manufacturer of cement. The deal is expected to double the Mexican firm’s revenues, creating a combined company with annual sales of around $15 billion (£8.3 billion).
The cash acquisition, worth 855 pence per RMC share, is to be implemented by way of a scheme of arrangement under section 425 of the Companies Act 1985. A court meeting and an extraordinary general meeting of RMC shareholders to approve the scheme will take place on 17 November 2004. Subject to regulatory clearances it is expected that the scheme will become effective on 12 January 2005.
CEMEX believe there is compelling industrial logic for the takeover, with RMC’s positions in cement, aggregates and ready-mixed concrete complementing their own strengths in cement. They say the acquisition will: enhance CEMEX’s business model through greater vertical integration; enhance the company’s cash flow stability through greater geographic diversification in developed markets, particularly in Europe; and generate approximately $200 million (£111 million) of annual synergies.
Commenting on the takeover, Lorenzo H. Zambrano, chief executive officer of CEMEX, said: ‘RMC’s businesses are an attractive fit in terms of both geography and business mix. The acquisition will increase CEMEX’s exposure to Europe and increase the company’s presence in downstream markets. I believe this is an attractive transaction for both RMC and CEMEX shareholders.
RMC’s chief executive, David Munro, added: ‘Recent changes in the way we operate have created a responsive business with the potential for a significant uplift in value. Becoming part of a powerful new group within the global heavy building materials industry will offer great scope and opportunities for our staff.’
