Cement maker Cemex SAB de CV of Mexico has been selling off assets around the world. But it probably hasn't had many negotiations like the ones it faced in Venezuela, where after after two months of talks but no agreement on price President Hugo Chavez moved Monday to seize Cemex operations in the country.
The global Cemex sell-off has to do with Cemex's $16 billion deal last year for Australia's Rinker Ltd., which had 80% of its operations in the U.S. Now it's trying to
navigate a U.S. housing crisis and a slowdown in other key markets.
The situation in Venezuela began in April, when Chavez said he would nationalize cement companies as part of a plan to
ensure state control of strategic industries and boost homebuilding, Bloomberg reports, working to bring about what he calls "21st-century socialism." As Reuters details, Chavez
has also bought the country's biggest phone company, a major bank, a steel mill and assets of oil joint ventures and electricity companies. High oil prices make it all possible.
Other cement companies did agree on price. Venezuela agreed to pay $267 million to France's Lafarge SA and $552 million to Switzerland's Holcim Ltd. for majority interests in their cement operations. But Cemex, the biggest cement operator in Venezuela, wanted about $1.3 billion for its assets -- a price too rich for Chavez's blood. After ten meetings over 60 days, one Cemex official told The Associated Press that
National Guard troops took control of cement plants in Maracaibo and Barquisimeto on Monday evening, hours before the midnight deadline.
Cemex needs to reduce debt. In the past few weeks, Cemex sold its Austrian and Hungarian operations for $485 million and tapped Merrill Lynch & Co. to advise it on a sale of certain assets in Australia, which generate revenues of about $234 million. Earlier, Cemex sold a 90% stake in telecom company Axtel for $257 million.
Oil Minister Rafael Ramirez told the AP the government will carry out a thorough appraisal of Cemex's assets in order to establish fair compensation. -
Baz HiralalVenezuela seizes control of cement companiesGo to the story from Bloomberg.comCemex restructures amid U.S. housing crisis
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