The Cemex Surprise

Nov 1, 2004

It may have been the biggest acquisition ever by a Mexican company, but the $5.75 billion deal by cement maker Cemex should have come as no shock.

On the Move: Cemex adds another acquisition to its expansion list

Ever since their last big acquisition in 2000, Cemex executives said they were focused on paying down debt amassed from previous takeovers. But at the end of September, they did an about face and announced yet another blockbuster acquisition. Cemex would buy Britain's RMC Group, paying $4.15 billion cash and assuming another $1.6 billion in debt for a total $5.75 billion.

While the deal caught many in the markets off their guard, it was a natural next step for a Mexican company that has spent a decade carving out a global presence. Nicholas Sakellariadis, managing director for mergers and acquisitions at Citigroup, which advised Cemex on the deal, puts it this way: "The Cemex vision is to be a global player, with vertical integration from aggregates to cement to ready mix."

Window of Opportunity
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