Sources: Cemex S.A.B. de C.V., Monterrey, Mexico; Eagle Materials Inc., Dallas; CP staff
The latest measure narrowing the Cemex USA portfolio to concrete, aggregate and cement operations in coastal or southern border states will see an asset sale involving Kentucky’s Kosmos Cement Co., seven distribution terminals plus raw material reserves to Dallas-based Eagle Materials Inc. As a 75/25 partner with Buzzi Unicem S.p.A. in Kosmos Cement, whose Louisville flagship has a 1.7-million ton/year capacity, Cemex will realize an estimated $499 million from the transaction.
The Kosmos facilities are a natural fit for Eagle Materials’ integrated network of cement plants in the U.S. heartland, says CEO Michael Haack. “[They] are high-quality, low-cost assets that align with our long-term strategic growth plans and meet our criteria for new investment,” he adds. “These assets will also enable us to participate more significantly in U.S. construction and infrastructure market growth.”
“This acquisition is especially timely in light of plans to separate our Heavy Materials and Light Materials businesses into two independent, publicly traded corporations,” affirms Chairman Mike Nicolais. “This investment reflects the balanced approach Eagle takes in capital allocation between profitable growth and return of capital to shareholders.”
Cemex CEO Fernando Gonzalez calls the transaction another milestone in achieving the objectives of “A Stronger Cemex,” an asset-streamlining program nearing $1.3 billion in proceeds.