Holcim expands Australian business through Cemex acquisition

Holcim will acquire Cemex Australia, a company with countrywide operations in the aggregates, ready-mix concrete and concrete products business, including its 25 percent interest in Cement Australia, in which Holcim has a 50 percent shareholding.

This important strategic acquisition enables the Group to move into the aggregates and concrete business in an attractive mature market.

Cemex Australia’s most important market positions are located in the continent’s densely populated eastern and southeastern states and in the mining belt of Western Australia all of which are markets amongst the fastest growing regions in Australia.

The purchase price of AUD 2.02 billion (CHF 1.77 billion) for Cemex Australia and the 25 percent stake in Cement Australia will be financed entirely with equity.

In addition, the Board of Directors of Holcim has decided, subject to the approval of the Chinese authorities, to fully participate. This corresponds to an investment of up to CNY 1.6 billion (approximately CHF 250 million) also planned to be fully financed with equity.

The Board of Directors will convene an extraordinary general meeting on July 8, at which the shareholders of Holcim Ltd will be asked to approve a capital increase leading to an inflow of funds in the amount of approximately CHF 2 billion.

The acquisition of Cemex Australia strengthens Holcim’s presence in Australia Under a contractual agreement between Cemex and Holcim, the Holcim Group is to take over full ownership of Cemex Australia including the 25 percent stake in Cement Australia at an enterprise value of AUD 2.02 billion (CHF 1.77 billion).

The purchase price corresponds to an EBITDA multiple of 6.6 times, based on an assumed EBITDA 2009. Closing of the transaction is contingent amongst others on the outcome of the due diligence process and the approval of the Australian authorities.

The acquisition strengthens Holcim Group in aggregates and ready-mix concrete Segments. Cemex Australia mainly operates in the eastern and southeastern states of Queensland, New South Wales and Victoria, as well as in Tasmania and in the mining belt of Western Australia.

The company owns 83 aggregate operations (crushed stone, gravel and sand) nationwide, with reserves of aggregates in excess of one billion tonnes, plus 249 ready-mix concrete plants and 16 pipe and concrete product plants.

In 2008, it reached sales of approximately AUD 1.86 billion and an EBITDA of approximately AUD 313 million.