Cemex Buys Holcim’s Czech Operations While Selling German Assets
Stock Chart for Cemex SAB de CV (CEMEXCPO)
Cemex SAB (CEMEXCPO), the biggest cement maker in the Americas, will buy Holcim Ltd. (HOLN)’s operations in the Czech Republic while selling assets in western Germany to the Swiss company. The companies will combine operations in Spain.
Holcim will pay Monterrey, Mexico-based Cemex 70 million euros ($94 million) in cash in connection with the transactions, the Mexican cement maker said in a statement today. Cemex said the deals will result in a recurring improvement in earnings before interest, taxes, depreciation and amortization of as much as $30 million starting next year.
Cemex has refinanced part of its debt, sold shares in a South and Central America unit and won credit upgrades during the last 15 months after the U.S. housing bust helped push it to the brink of default.
“When finalized, this will be an important strategic step that should allow Cemex to improve its footprint in Europe, and it will consolidate our portfolio in the continent,” Cemex Chief Executive Officer Lorenzo Zambrano said in the statement.
Cemex’s second-quarter loss narrowed to $152 million from $187 million in the same period a year earlier as higher prices and cement volume in the U.S. helped push total sales up 3.8 percent to $4.01 billion, the company said July 25. Revenue in northern Europe slid 1 percent to $1.09 billion as operating earnings before interest, taxes, depreciation and amortization in the region dropped 11 percent to $108 million. Cemex has lost money on a net basis for 15 consecutive quarters.
The stock has climbed 22 percent this year in Mexico trading, compared with a 9.3 percent decline for the benchmark IPC index, as investors bet on a continued housing recovery in the U.S., Cemex’s largest foreign market.
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