Cemex confirmed on Sept. 17 that discussions are under way potentially leading to the sale of $3.5 billion to $4.5 billion in U.S. ready mixed, manufactured concrete, aggregate and cement production assets to CRH
Sources: Cemex S.A.B. de C.V.; CRH Plc, Dublin; CP staff
Cemex confirmed on Sept. 17 that discussions are under way potentially leading to the sale of $3.5 billion to $4.5 billion in U.S. ready mixed, manufactured concrete, aggregate and cement production assets to CRH, parent company of the Oldcastle Architectural, Precast and Materials entities to which those properties are ideally suited. Prospective assets for divestiture include the Rinker/Hydro Conduit pipe and precast network Cemex inherited from its June 2007 Rinker Group takeover; 39 ready mixed, block and aggregate plants in Florida and Arizona the U.S. Department of Justice/Antitrust Division pinpointed in April 2007 as part of its Cemex USA-Rinker Materials regulatory review; Rinker Materials’ Pacific Northwest ready mixed and materials businesses; Kentucky aggregates operations; and, Fairborn, Ohio, and Wampum, Pa., cement mills.
Virtually all properties noted in a joint Cemex-CRH announcement are strategic to existing Oldcastle businesses, or are in markets they have recently entered. The Rinker/Hydro Conduit pipe and precast franchise–the number-two player in drainage products behind Hanson Pipe & Products–would bring complementary business to Oldcastle Precast. A key national player in modular building systems, Oldcastle Precast also has strong regional positions in architectural and non-architectural concrete products, the latter including gravity pipe and drainage structures.
The Kentucky aggregate, and Pennsylvania and Ohio cement properties Cemex noted as part of the CRH discussions date to Southdown Inc., which Cemex acquired in 2000. The Kentucky business would appear to align with APAC aggregate and asphalt properties Oldcastle Materials added in August 2006. The cement plants likewise serve Rust Belt and Great Lakes regions encompassing ready mixed, precast and block & paver plants under respective Oldcastle banners. The sale of those properties would continue an exit from Southdown markets above Sunbelt states that Cemex began with the 2005 sale of Illinois and Michigan cement mills and terminals to Votorantim, a Brazilian operator with Ontario and Florida footholds. Acquisition of the Fairborn and Wampum mills would follow CRH’s recent chartering of a cement production platform in North America–American Cement Co. LLC–under development in Sumterville, Fla.