CEMEX's Acquisition Strategy - The Acquisition of Rinker Group
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Case Details:
Case Code : BSTR376
Case Length : 29 Pages
Period : 2005-2010
Pub Date : 2010
Teaching Note :Not Available
Organization : CEMEX S.A.B de C.V
Industry : Cement
Countries : Mexico, Australia
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Excerpts Contd...
Post-Acquisition Problems
In January 2008, CEMEX announced its financial results for the financial year ended December 31, 2007. The company reported net sales of US$ 21.7 billion, 19% higher than the net sales reported in fiscal 2006. Its net profit rose to US$ 2.9 billion from US$ 2.37 billion.
The results included Rinker's sales and net profit for the six months ended December 31, 2007. CEMEX ended the fiscal 2007 with a debt of US$ 19.9 billion as against a debt of US$ 5.81 billion at the end of fiscal 2006. Its net-debt-to-EBIDTA ratio went up to 3.6 by the end of 2007, from 1.4 at the end of fiscal 2006.
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Future Tense?
In July 2009, CEMEX lowered its free cash flow forecasts for the fiscal year 2009 to US$ 1.6 billion as against the previous forecast of US$ 2.05 billion. This led to worries among the company's shareholders and lenders...
Exhibits
Exhibit I: CEMEX - Income Statements (2004-08)
Exhibit II: CEMEX Quarterly Income Statements (2009)
Exhibit III: CEMEX Balance Sheets (2006-08)
Exhibit IV: Rinker Stock Price Chart (April 2006 -- October 2006)
Exhibit V: Income Statements of Rinker (2006-07)
Exhibit VI: Balance Sheets of Rinker (2006-07)
Exhibit VII: A Note on Cement Industry in the US (2005 - 2009)
Exhibit VIII: CEMEX - Contractual Obligations as of December 31, 2008
Exhibit IX: CEMEX Stock Price Chart
Exhibit X: Mexican Peso Vs US$ Chart
Exhibit XI: CEMEX Cash Flow Statement (2008)
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