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Mexico's Cemex to launch takeover bid for Rinker

October 28, 2006|From the Associated Press

MEXICO CITY — Mexican cement manufacturer Cemex said Friday that it would launch what apparently is a hostile deal to take over Australian building materials producer Rinker Group for about $11.7 billion in cash.

If accepted, the debt-financed deal would expand Cemex's presence in the U.S., where it is already the biggest supplier of cement.

A Rinker spokeswoman told Dow Jones Newswires in Sydney, Australia, that the offer was "a hostile bid, we had no knowledge of it" and added that "it is too early at this stage to give any indication of what the board's response might be."

Hector Medina, Cemex's executive vice president of planning and finance, said the takeover bid was announced prior to talks with Rinker because "there have been significant rumors" and "certainly we would hope for a friendly deal."

Cemex said it planned to offer $65 in cash for every Rinker American depository receipt.

In trading Friday, shares of Rinker soared $17.70, or 33%, to $71.10, indicating that investors were expecting an improved offer from Cemex. Cemex fell $1.45, or 4.5%, to $30.55.

The offer would be worth about $11.7 billion based on the number of Rinker shares outstanding.

Cemex put the value at $12.8 billion, including Rinker's debt.

A deal would make Cemex one of the world's largest building materials companies, with annual revenue of $23.2 billion and more than 67,000 employees in more than 50 countries.

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