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Cemex's Aussie business sold
By Katie Reid |
June 16, 2009, Tuesday
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Swiss cement maker Holcim will buy the Australian business owned by the debt-laden Mexican company, Cemex, for A$2.02 billion (US$1.64 billion) and plans a capital hike to fund the deal, it said yesterday.
The acquisition, which one analyst said Holcim has secured cheaply, is the Swiss firm's largest for several years, and the firm will ask shareholders next month to approve a rights issue to raise around 2 billion Swiss francs (US$1.86 billion).
The deal will give Holcim, the world's second-biggest cement maker, access to the fast-growing eastern and southeastern Australian markets as well the mining belt of Western Australia, it said.
It will also generate much-needed cash for Cemex, which has been struggling to refinance US$14.5 billion of debt that falls due by the end of 2011, including US$4.1 billion maturing this year, amid falling sales volumes.
Cemex bought Australia's Rinker in 2007 in one of the largest ever emerging-market takeovers, triggering the start of its financial difficulties. Rinker's United States assets made Cemex the top cement maker in the US, but the deal closed just as the US housing collapse struck.
Yesterday's deal involves only Rinker's Australian operations.
Holcim also said yesterday that it will invest around 1.6 billion yuan (US$234 million) in the planned private placement of China's Huaxin Cement, in which it already has a stake of around 40 percent, adding this deal would also be financed with equity.
"I interpret the acquisitions as very positive on the strategic side. They make sense and will help Holcim to reach (its) strategic targets," one Zurich-based trader said. "But Holcim needs capital, around 2 billion or 12 percent of capitalization," he said.
The purchase price of Cemex Australia corresponds to an earnings before interest, tax, depreciation and amortization multiple of 6.6 times, based on the assumed EBITDA of 2009, Holcim said.
In 2008, Cemex Australia had sales of A$1.86 billion and an EBITDA of around A$313 million.
The acquisition, which one analyst said Holcim has secured cheaply, is the Swiss firm's largest for several years, and the firm will ask shareholders next month to approve a rights issue to raise around 2 billion Swiss francs (US$1.86 billion).
The deal will give Holcim, the world's second-biggest cement maker, access to the fast-growing eastern and southeastern Australian markets as well the mining belt of Western Australia, it said.
It will also generate much-needed cash for Cemex, which has been struggling to refinance US$14.5 billion of debt that falls due by the end of 2011, including US$4.1 billion maturing this year, amid falling sales volumes.
Cemex bought Australia's Rinker in 2007 in one of the largest ever emerging-market takeovers, triggering the start of its financial difficulties. Rinker's United States assets made Cemex the top cement maker in the US, but the deal closed just as the US housing collapse struck.
Yesterday's deal involves only Rinker's Australian operations.
Holcim also said yesterday that it will invest around 1.6 billion yuan (US$234 million) in the planned private placement of China's Huaxin Cement, in which it already has a stake of around 40 percent, adding this deal would also be financed with equity.
"I interpret the acquisitions as very positive on the strategic side. They make sense and will help Holcim to reach (its) strategic targets," one Zurich-based trader said. "But Holcim needs capital, around 2 billion or 12 percent of capitalization," he said.
The purchase price of Cemex Australia corresponds to an earnings before interest, tax, depreciation and amortization multiple of 6.6 times, based on the assumed EBITDA of 2009, Holcim said.
In 2008, Cemex Australia had sales of A$1.86 billion and an EBITDA of around A$313 million.
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