Aug. 19 (Bloomberg) -- Venezuela's government extended its hold on the economy with accords to take majority stakes in the local units of cement companies Lafarge SA and Holcim Ltd., and by seizing Cemex SAB's factories.

The government took operational control of Cemex's unit, the largest producer in Venezuela, after failing to reach an agreement with the company in at least 10 meetings, Energy Minister Rafael Ramirez said during a midnight ceremony at a plant in the state of Anzoategui.

Red-shirted supporters waving Venezuelan flags accompanied Ramirez. Judges and National Guard troops also took part in the takeover, Globovision reported.

President Hugo Chavez said in April he would nationalize cement companies as part of a plan to ensure state control of strategic industries. Chavez is working to bring about what he calls ``21st-century socialism,'' and his administration has seized the country's biggest phone company, a steel mill as well as assets of oil joint ventures and electricity companies.

``The government reached an agreement with the smaller companies but not the biggest one,'' said Asdrubal Oliveros, a director at Caracas-based consulting firm Ecoanalitica. ``If the negotiations with Cemex are suspended and they enter into confrontation it wouldn't benefit either side.''

Venezuela will buy 89 percent of the local unit of Paris- based Lafarge for $267 million and 85 percent of Jona, Switzerland-based Holcim's unit for $552 million, Vice President Ramon Carrizalez said.

`Fair Price'

The amount cited to be paid to Holcim was ``a fair price,'' Patrick Appenzeller, an analyst at Helvea in Zurich said in a note today. An agreement on the price has been reached ``in principle,'' though is still subject to due diligence, the Swiss cement maker said today in an e-mailed statement.

Holcim's shares fell 2.3 percent to 77.6 francs in Zurich trading, cutting its market value to 20.5 billion francs ($18.7 billion). Lafarge dropped 3 percent to 80.63 euros on the Paris Stock Exchange, giving it a market value of 15.7 billion euros ($23.2 billion).

Cemex, based in Monterrey, Mexico, fell 55 cents, or 2.6 percent, to $20.65 in New York Stock Exchange composite trading. Cemex's Venezuela subsidiary had trading halted for 24 hours because of the expropriation, the Caracas stock exchange said on its Web site today.

Seeking Compensation

Cemex is seeking $1.2 billion in compensation, Ramirez said, describing the figure as ``way, way above,'' the value of the plants. In past takeovers, the government has continued talks after taking control of companies.

Cemex, in a statement today, confirmed the government took control of its operations.

The Mexico's foreign ministry said it has formally asked Venezuelan officials to continue negotiating with Cemex.

The talks should be based on dialogue that's open, legal and with ``non-discriminatory treatment,'' the ministry said in a statement.

Adding the three companies to existing state-owned cement companies will give the government a 98 percent share of the country's cement industry, state energy company Petroleos de Venezuela SA said in a statement.

``Tonight, the cement factories pass into the state's hands, as did Sidor, as did the Orinoco Belt oil area, as did Cantv,'' Chavez said yesterday, referring to past nationalizations. ``All those are steps toward socialism.''

Homebuilding

The Venezuelan government is nationalizing more of the cement industry than previously anticipated, said Helvea's Appenzeller, who rates Holcim stock ``buy.'' Chavez said in April the country planned to nationalize at least 60 percent of all overseas cement producers operating in Venezuela.

The government takeover will help boost homebuilding, the Venezuelan leader said April 3. The president says his efforts to promote state-run enterprises, create joint ventures with private companies and cap prices for some goods will help redistribute wealth from oligarchs to the poor.

``It's important for Holcim that it has reached a `friendly' accord with the government and it keeps at least a small stake in case of any political change in the future,'' Appenzeller said.

Holcim's Venezuelan unit had net sales of about $200 million in 2007, accounting for about 1 percent of the company's total, the cement maker said in today's statement.

Cemex said in July that it may sue if it doesn't get a fair price for its assets. Cemex reserves the right ``to bring expropriation claims in arbitration under the bilateral investment treaties Venezuela signed,'' said Hector Medina, Cemex's executive vice president of planning and finance.

Cemex Unit

In June, Cemex stripped properties from its Venezuelan subsidiary and transferred a special cash dividend from the unit to the parent company.

The loss of the Venezuelan unit, which accounts for about 5 percent of Cemex's value, has already been priced into the company's shares, said Dan McGoey, an analyst with Deutsche Bank in Mexico City. Any proceeds Cemex gets from the forced sale will be seen as a positive and help reduce its debt, he said.

``We're content to have reached an agreement and will be working together in a partnership to continue construction growth in Venezuela,'' Maximo Dolman, executive president of Lafarge in the country, said on state television yesterday.

The French and Swiss companies signed memorandums of understanding with Venezuela, in a reprise of the process of the state takeovers of four heavy-oil joint ventures in the Orinoco Belt last year, when most of the private companies involved signed agreements a week before Petroleos de Venezuela took over operations in a May Day ceremony.

Arbitration Claims

Exxon Mobil Corp. declined to attend last year's ceremony and later demanded $12 billion from Venezuela in arbitration.

The Venezuelan government seized the country's largest steelmaker, Siderurgica del Orinoco, earlier this year. It will pay Techint Group $1.65 billion for a 50 percent stake in Siderurgica, Argentine newspaper Clarin reported yesterday without saying how it obtained the information.

Venezuela is facing arbitration claims in an international court by Exxon Mobil and ConocoPhillips over the expropriation of oil projects; Brandes Investment Partners over the takeover of phone company Cantv; Vestey Group Ltd. over a farm nationalization and Vannessa Ventures Ltd. over the seizure of a gold mine.

Venezuela is spending billions of dollars from its windfall oil income on company takeovers, leaving less for Chavez's social programs, promised foreign refineries and restoring oil output.

Oil Income

Petroleos de Venezuela's oil income grew by 80 percent in the first quarter to $3.45 billion, providing cash for the government. A new tax on the company, known as PDVSA, and other oil producers will bring in $9 billion this year, Energy and Oil Minister Ramirez said April 15.

Payments for recent nationalizations are likely to exceed $11 billion, Caracas consultant Ecoanalitica said Aug. 15. Last year's takeover of oilfield projects from ConocoPhillips and Exxon Mobil caused Conoco to write off $4.5 billion and Exxon to sue for $12 billion. Buying Banco de Venezuela from Spain's Banco Santander SA will cost $1.5 billion and taking over the cement companies and steel mill may add $3 billion more.

To contact the reporters on this story: Daniel Cancel in Caracas at dcancel@bloomberg.net; Steven Bodzin in Caracas at sbodzin@bloomberg.net

Last Updated: August 19, 2008 19:12 EDT