Cemex Board May Decide on Zambrano’s Successor This WeekBrendan Case
The board of Cemex SAB, the largest cement producer in the Americas, may decide this week on a new chief executive officer to replace the late Lorenzo Zambrano.
Directors are likely to hold a meeting in the next few days, Chief Financial Officer Fernando Gonzalez said yesterday after a funeral Mass for Zambrano, who had led Monterrey, Mexico-based Cemex for almost three decades. Zambrano died of heart failure on May 12 in Madrid at the age of 70.
“The board meeting should occur this week,” Gonzalez told reporters. “What I can’t tell you is the result.”
A swift decision on a new CEO may reassure investors about the course of Cemex after Zambrano’s long tenure. He led the company to the top of the regional industry with $29 billion of acquisitions and became one of Mexico’s best-known CEOs, while leaving no publicly anointed successor.
Cemex fell 1 percent to 16.10 pesos at the close in Mexico City, its second straight decline. The shares have gained 9.2 percent this year, beating the 2.7 percent drop for Mexico’s benchmark IPC index.
Gonzalez, 59, is the odds-on favorite to succeed Zambrano, according to Garik Shmois, an analyst with Longbow Research, who recommends buying the cement maker’s American depositary receipts.
The CFO said he didn’t know whether the board would consider hiring a leader from outside the company and said major shifts in the business are unlikely.
“Cemex’s strategy should be maintained,” Gonzalez told reporters. “The strategy is to participate in the global market of the building materials industry.”
Gonzalez, who isn’t a director, said only the board knows details of Cemex’s succession planning. Even if the board meets this week, there’s no guarantee it will make a final decision on new leadership, Gonzalez said.
Zambrano, whose grandfather founded the cement maker, held both the CEO’s title and the chairmanship. Senior management of the company includes Gonzalez and six presidents for regions such as the U.S., Mexico and Northern Europe.
The next CEO will inherit a 108-year-old company poised to turn its first quarterly profit since 2009 as a global building recovery boosts demand for cement. Zambrano’s buying spree was capped by the $14.2 billion purchase of Rinker Group Ltd. in 2007, boosting its exposure to the U.S. just as the housing industry was collapsing. The deal later brought Cemex to the brink of default.
Cemex’s board includes Rogelio Zambrano, a first cousin of the late CEO, and Roberto Zambrano, a second cousin. Another relative is board member Tomas Milmo Santos, the chairman and CEO of telecommunications company Axtel SAB.
Lorenzo Zambrano never married and had no children.