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Cemex gets all clear for RMC takeover

MATERIALSShareholders and European competition authorities give go-ahead for acquisition

MEXICAN cement giant Cemex is set to complete its takeover of UK-based rival RMC Group next week.

The deal has been ratified by shareholders and only a last-ditch move by competition authorities in the United States can scupper the £2.3 billion deal after it was given the all-clear by European competition bodies.

US watchdogs were due to report on Wednesday and were expected to approve the deal as Construction News went to press.

Insiders are confident the bid will sail through the necessary regulatory approvals and will be formally sanctioned next week.

The company will rebrand as Cemex UK following the official announcement.The move will confirm Cemex's position as the second largest heavy building materials group in the world behind French-owned Lafarge.

It will operate in more than 50 countries across the world following the take over, increasing the number of countries it is represented in by 20.

One insider said: 'Cemex was particularly attracted by the foothold that RMC has in Eastern Europe.This will allow it to expand in what it sees as an important area.'

The deal will allow it to take over RMC cement arm Rugby Cement and its production facility in Rugby, which has been plagued by problems since its expansion.

An insider said: 'Rugby has had some commissioning and production problems and Cemex is confident it can use its knowledge and expertise to remedy them.'

Last year RMC underwent a round of cost-cutting including the loss of 500 jobs and a merger of its concrete and aggregate divisions in an effort to bring the group's debt below £1 billion. It failed in a bid to offload its troubled German arm to rival producer Heidelberg Cement.

But it did manage to staunch its losses and Cemex bosses claimed there was a compelling industrial logic for the deal.

Chairman and chief executive Lorenzo Zambrano said: 'RMC's businesses are an attractive fit in terms of both geography and business mix.The acquisition will increase Cemex's exposure to Europe and increase its presence in downstream markets.'

RMC's chairman Sir John Parker said at the time of the approach: 'Cemex has recognised the potential for recovery that is now under way at RMC. At this level we are creating superior cash value for our shareholders. In addition shareholders will remain entitled to receive RMC's interim dividend.'

Cemex tabled an offer of 855p per share plus a dividend to RMC shareholders in September, an offer which was accepted at shareholder meetings.