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CEMEX divestment and takeover announcements

CEMEX

Sale of concrete pumping assets in Mexico; plus takeover bid for Trinidad Cement Ltd

CEMEX have entered into a definitive agreement to divest CEMEX Concretos’ ready-mixed concrete pumping assets in Mexico to Pumping Team SLL for approximately US$80 million, plus an additional US$29 million contingent on future performance targets.

The assets being divested consist mainly of CEMEX Concretos’ 507 ready-mixed concrete pumping units and other related assets.

Pumping Team, a Spanish-based company that specializes in providing pumping services, will become the suppliers of ready-mixed concrete pumping to CEMEX and their customers in Mexico.

‘This transition will be seamless for CEMEX’s customers, as they will continue dealing directly with the company to obtain pumping services for our ready-mix products,’ said Juan Romero, president of CEMEX Mexico.

‘This strategic divestment will allow us to increase our focus on our core ready-mixed concrete business while transferring pumping services to a specialized company, thereby ensuring continued quality to our customers.’

The closing of the transaction, which is expected to take place during the first quarter of 2017, is subject to the satisfaction of certain conditions, including approval from regulators in Mexico.

The proceeds obtained from the transaction will be used mainly for debt reduction and for general corporate purposes.

Meanwhile, CEMEX have also announced that one of their indirect subsidiaries, Sierra Trading, is to present an offer and takeover bid to all shareholders of Trinidad Cement Ltd (TCL), a company publicly listed in Trinidad and Tobago, Jamaica and Barbados.

Sierra are seeking to acquire up to 132,616,942 ordinary shares in TCL for TT$4.50 in cash per share, which, together with their existing share ownership in TCL of approximately 39.5%, would result in them holding up to 74.9% of the equity share capital in the company.

Full acceptance of the offer would result in a cash payment by Sierra of approximately TT$597 million (US$89 million), representing a premium of 33.1% over the 1 December 2016 closing price of TCL’s shares on the Trinidad and Tobago Stock Exchange.

Among other conditions, the offer will be conditional upon Sierra acquiring at least an amount of TCL shares that would allow CEMEX to consolidate TCL. Unless extended, the offer period is expected to close on 10 January 2017.

If the offer is successful, TCL will continue operating as usual. Moreover, TCL will be maintained as a publicly listed company on the Trinidad and Tobago Stock Exchange, benefitting from its strong local shareholding together with proven management and operational expertise from CEMEX.

TCL’s main operations are in Trinidad and Tobago, Jamaica and Barbados, and the company is the majority shareholder of Caribbean Cement Company Ltd, one of the main cement producers in Jamaica.

As of 30 September 2016, TCL and their subsidiaries had achieved EBITDA of approximately US$77 million for the previous 12 months, while net debt stood at approximately US$113 million.

Assuming the offer is successful, TCL will be consolidated by CEMEX.

‘This offer represents a clear sign of our commitment to TCL and the region,’ said Fernando A. Gonzalez, chief executive officer of CEMEX.

‘In addition, although we believe that our offer is attractive, given the premium to the current share price, as part of this commitment, it is also important to us that TCL remain a listed company, so that local investors can continue to benefit from the development of TCL in the future.’ 

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