Board of UK concrete maker accepts record offer from Cemex, the world’s third largest cement producer
Cemex, the world’s third largest cement producer, is set to buy quoted concrete maker RMC for £2.3bn.
The Mexican company has agreed to pay 855p a share in cash for the British group. This represents a 43% premium to the 599.5p share price as it stood last Friday, before the announcement on Monday.
The takeover, designed to capitalise on RMC’s European business, is the biggest ever by a Mexican company.
The high price has stunned analysts in the City, who this week said it was a great deal for RMC’s shareholders.
Cemex’s high takeover bid, which has been recommended by RMC’s board, is aimed at preventing any rival offers.
The takeover makes strategic sense for Cemex as the two companies have little geographic overlap.
Michael Ankers, chief executive of the Construction Products Association, said the deal should not affect RMC customers: “My immediate reaction is that I cannot see any significant difference as there is no overlap in the UK. Strategically it is a good fit.”
The market in Mexico accounts for half of Cemex’s income, the rest derives from its operations in Spain, Indonesia, the Philippines and Egypt.
Despite the proposed takeover, Cemex will remain third biggest cement producer in the world, behind French firm Lafarge and Swiss company Holcim.
If the deal goes ahead, the UK’s three biggest cement producers will be owned by foreign companies. Blue Circle was bought by Lafarge four years ago and Castle Cement is owned by German group Heidelberg.
RMC has a total of 14 plants in the UK. Its profit halved in the first six months of 2004 to £46m because of closures in Germany and a series of stoppages at a UK plant in Rugby.
The deal is not expected to affect RMC’s prices, nor lead to job losses, despite Cemex pledging to make £100m of savings. The future of RMC’s chairman Sir John Parker, and chief executive David Munro, was unclear as Building went to press. Both were unavailable for comment.
RMC’s share price rose 42% to 850.5p at the close of trading on Monday.