Cemex to Sell Some Europe Assets

MEXICO CITY—Mexican cement and building materials company Cemex SAB signed agreements to sell assets in Europe for €391 million ($437.9 million), making a start on a plan to sell assets for as much as $1.5 billion to pay down debt.

Cemex said Wednesday it will sell three cement plants, two aggregates quarries and seven ready-mix concrete plants in Croatia to Duna-Drava Cement for about €230.9 million. It will also sell 29 aggregates quarries and 64 ready mix plants in Austria and Hungary to Rohrdorfer Group for €160.1 million. It expects to close the deals in the fourth quarter.

Cemex's operations in Croatia had sales of $138 million in 2014, while the Austrian and Hungarian operations generated sales of $288 million. The Croatia sale also includes some facilities such as terminals in Bosnia & Herzegovina, Montenegro and Serbia.

The sales are the first under a plan by the Monterrey-based company to sell assets for up to $1.5 billion over the next year to lower its debt, which stood at $15.93 billion at the end of June, down from $17.05 billion a year earlier.

"Under different circumstances, this news should be positive for the share price. However, given the macroeconomic environment, in the best of cases it should put a floor on the Cemex share price," the Vector brokerage said in a note. Cemex shares were down 2.4% early Wednesday on the Mexican stock exchange at 12.98 pesos ($0.80).

The sale of the assets should increase Cemex's profitability, since its profit margins in Northern Europe, which includes Austria and Hungary, are below those of its other markets, Vector added.

Other countries where Cemex has operations in Europe include the U.K., Germany, France, Spain, and the Czech Republic.

Write to Anthony Harrup at [e-mail]

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