Mexican cement producer Cemex last week agreed to buy Australian concrete company Rinker Group, after raising its cash takeover offer from US$13.00 to US$15.85 per share.
The agreement ends a five-month takeover battle which started in October after Rinker rejected Cemex's initial offer as too low. Rinker, which gets over 80 percent of its sales from the US, had argued that the US housing slump would only be temporary and that Rinker had a valuable market share in Florida, Arizona, and Nevada -- states that the government predicted would see the fastest population growth in the next 25 years.
Cemex quickly moved to sweeten their offer after gaining US regulatory approval on the last day before the four-day Easter holiday in Australia, making their latest bid of US$14.2 billion.
The US Justice Department approved the takeover with the condition that Cemex sell its 32 ready-mix concrete and concrete block plants in Florida as well as seven ready-mix concrete and gravel facilities in Arizona in order to preserve price competition in these two states.
If the takeover wins the approval of Rinker's shareholders, it will be the biggest-ever takeover by a Mexican company. A combined Cemex-Rinker will have annual sales of around $US23 billion and will be the world's largest supplier of sand and gravel.
Nuevo León, Mexico-based Cemex is the largest US supplier of ready mix concrete and cement, producing and distributing cement, ready mix concrete, aggregate, concrete block, concrete pipe, and related building materials to customers in more than 50 countries. Approximately 25 percent of Cemex's revenues are earned in the US. Cemex operates in the US through its wholly-owned subsidiary, Cemex Inc., headquartered in Houston, Texas.
Rinker, headquartered in Chatswood, Australia, produces and distributes aggregate, ready mix concrete, cement, concrete block, asphalt, concrete pipe, rebar and other construction materials through its operations in the US and Australia. Rinker is the second largest US supplier of ready mix concrete and the fifth largest US supplier of aggregate. Approximately 80 percent of Rinker's revenues are earned in the US, through its subsidiary Rinker Materials Corporation, headquartered in West Palm Beach, Florida.