Cemex, the Mexican cement producer, this week completed its £3bn takeover of UK concrete company RMC.
Cemex agreed to buy the company in October for 855p a share, and on Tuesday said that the purchase was complete. The price was a 43% premium to RMC’s 599.5p share price at the time the deal was struck.
The deal means that RMC is now part of the world’s second largest building materials groups after Lafarge. According to the two companies’ returns for last year, the group would have made sales of £8.5bn and a profit of £1.6bn.
Annually it is expected to produce 99 million tonnes of cement, 154 million tonnes of aggregates and 77 million m3 of ready-mixed concrete.
The high price paid by Cemex, which is listed on the New York and Mexican stock exchanges, stunned analysts in the City, who described it as a great deal for RMC shareholders.
The high price paid by Cemex stunned City analysts
Deals such as this in the materials sector are partly driven by similar consolidation among builders’ merchants. Both groups are growing to maintain their commercial clout.
The takeover is the biggest ever undertaken by a Mexican firm. Cemex chose RMC because they had a good geographical fit. RMC operated in 22 countries, and the only overlap between the two businesses was in the USA and Spain.
A Cemex spokesperson said the completion of the takeover would be followed by a review of the brand identities of all of RMC’s divisions.