Holcim buys Cemex's Australia business for $1.62B

ZURICH, Switzerland - Swiss cement maker Holcim AG said Monday it is buying the Australian operations of Mexican rival Cemex SAB de CV for about 2.02 billion Australian dollars ($1.62 billion).

The purchase, which will be financed entirely with equity, includes all of Cemex Australia and a 25-percent stake in Cement Australia. Holcim already has a 50-percent shareholding in Cement Australia.

Holcim also said Monday it will participate in the planned private placement of China's Huaxin Cement, to the value of 1.6 billion yuan ($234 million).

The Holcim board will hold an extraordinary general meeting on July 8 to ask shareholders to approve a capital increase of about 2 billion Swiss francs ($1.84 billion), the company said.

Cemex picked up some of the facilities it is now selling in 2007 as part of the company's $14.25 billion purchase of Australia's Rinker Group Ltd.

But Cemex has suffered reversals amid slow cement volumes in key markets since then.

Cemex's net income plunged 99 percent in the first quarter of 2009 due to a precipitous drop in sales. The company also reported a $707 million loss in the fourth quarter of 2008 as slumping housing and 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 and refinance $18 billion in debt by 2011. The company says it also plans to sell plants in Austria, Hungary and elsewhere.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.