Venezuela nationalises cement - Cemex plants siezed
19 August 2008
Venezuela has nationalised its cement industry with the acquisition of majority stakes in Holcim and Lafarge's operations, and the seizure of Cemex's assets in the country.
In April the government announced it would force these three companies to sell at least 60% of their Venezuela-based businesses to it. Under agreements signed this week it will acquire 85% of Holcim's Venezuelan businesses for a reported US$ 552 million and 89% of Lafarge's interests in the country for US$ 267 million. Both deals are subject to due diligence, with financial close expected in a few weeks.
However, following the breakdown of talks with Cemex, government troops seized control of the company's three cement plants, which have a total capacity of 4.6 million tonnes per year. According to Government sources, Cemex was holding out for some US$ 1.2 billion in compensation for its assets, a price the Government was not prepared to pay.Venezuela's nationalisation programme began in 2006 with the takeover of various foreign-owned oil production facilities. The cement industry was next in the firing line, with left-wing president Hugo Chavez using the country's housing shortage and the fact that Venezuela exports cement as reasons for the state to take control of the industry.