Company To Watch: Cemex/Mexico
Cemex has transformed itself from Mexico’s largest cement company into the world’s third-largest cement maker through a series of major acquisitions. If it is able to bag Australia’s Rinker Group, Cemex will become one of the world’s largest building materials companies.
In October 2006 the Mexican company announced a $12.8 billion takeover offer for Rinker, which generates more than 80% of its revenues in the US market. Rinker rejected the offer as being far too low, but Cemex says Rinker’s estimate of its own worth does not account for the slowdown in the US housing market.
Lorenzo Zambrano, chairman and CEO of Cemex, says Rinker complements the Mexican company’s existing US operations and would extend its global network into Australia. Cemex is also interested in Rinker’s four plants in China.
Cemex says the residential housing market in the US is declining faster than expected as a result of falling new-home sales and high inventory levels. It says that the infrastructure and the industrial and commercial sectors continue to be the main drivers of cement consumption in the US.