Swiss cement maker Holcim buys Mexican rival Cemex's Australia business for $1.62BN

Swiss cement maker Holcim AG said it is buying the Australian operations of Mexican rival Cemex SAB de CV for about $2.02B Australian ($1.62B). The purchase, which will be financed entirely with equity, includes all of Cemex Australia & a 25% stake in Cement Australia. Holcim already has a 50% shareholding in Cement Australia. Holcim also said it will participate in the planned private placement of China's Huaxin Cement, to the value of 1.6B yuan ($234M). The Holcim board will hold an extraordinary general meeting July 8 to ask shareholders to approve a capital increase of 2B Swiss francs ($1.84B), it said. Cemex picked up some of the facilities it is now selling in 2007 as part of its $14.25B purchase of Australia's Rinker Group Ltd.. But Cemex suffered reversals amid slow cement volumes in key markets since then. Cemex's net income dove 99% in the 1st-Q of 2009 due to a precipitous drop in sales. It also reported a $707M loss in the 4th-Q of 2008 as slumping housing & tight credit markets slowed construction in the U.S., the top buyer of its products. The sale is part of a Cemex plan to reduce costs & refinance $18B in debt by 2011. It says it also plans to sell plants in Austria, Hungary and elsewhere.