CEMEX To Improve Europe Portfolio, To Buy Holcim's Operations In Czech Republic

(RTTNews) - Building materials company CEMEX, S.A.B. de C.V. (CX) Wednesday said it has reached an agreement with Holcim (HCMLY.PK) to conduct a series of transactions that would improve its strategic footprint in Europe.

CEMEX will acquire all of Holcim's assets in the Czech Republic, which include one cement plant, four aggregates quarries and 17 ready-mix plants.

The Czech Republic is a market with a strong economy and solid prospects. CEMEX expects that acquiring these assets should improve its operations in the country and in Central Europe.

CEMEX will divest its assets in the western part of Germany to Holcim, which include one cement plant and two grinding mills, one slag granulator, 22 aggregates quarries and 79 ready-mix plants.

The German market is an attractive one and CEMEX will still be present in the eastern, northern and southern part of the country with an important footprint, the company noted.

In Spain, CEMEX and Holcim will combine all their cement, ready-mix and aggregates operations. CEMEX will have a 75 percent controlling interest over the combined operational assets in this country.

As part of these transactions, Holcim will pay CEMEX 70 million euros in cash. Additionally, the transactions are expected to generate synergies that will result in a recurring improvement in CEMEX's EBITDA of about $20 million to $30 million, beginning from 2014.

Lorenzo Zambrano, Chairman and CEO of CEMEX, said, "When finalized, this will be an important strategic step that should allow CEMEX to improve its footprint in Europe, and it will consolidate our portfolio in the continent."

The firm currently expects to finalize these transactions during the fourth quarter. BBVA, Citigroup and Santander are acting as financial advisors to CEMEX in these deals.