Eagle Materials Inc. announced that it has entered into a definitive agreement with Kosmos Cement Co. (a 75/25 joint venture between Cemex S.A.B. de C.V. and Buzzi Unicem S.p.A.), to purchase Kosmos’ Louisville, Ky., cement plant, as well as seven distribution terminals and raw material reserves. The plant has the capacity to produce nearly 1.7 million tons of cement annually, boosting Eagle Material’s U.S. cement capacity by roughly 25%.
Michael Haack, Eagle Materials president and chief executive officer, said the agreement represents a significant milestone in the company's growth strategy. “At Eagle, we have been disciplined in the strategic growth of our integrated network of cement plants in the U.S. heartland, and the Kosmos facilities are a natural fit. The Kosmos facilities are high-quality, low-cost assets that align with our long-term strategic growth plans and meet our criteria for new investment. These assets will also enable us to participate more significantly in U.S. construction and infrastructure market growth.”
“This acquisition is especially timely in light of plans to separate our Heavy Materials and Light Materials businesses into two independent, publicly traded corporations,” affirmed Eagle Materials Chairman Mike Nicolais. “This investment reflects the balanced approach Eagle takes in capital allocation between profitable growth and return of capital to shareholders.”
“This is another key milestone in achieving our ‘A Stronger Cemex’ objectives. Now, closed or announced asset sales are in excess of $1.3 billion under this program. We are pleased with the continued favorable asset-divestment dynamics in our industry,” said Fernando A. Gonzalez, CEO of Cemex.
The proceeds obtained from this transaction will be used mainly by Cemex for debt reduction and for general corporate purposes.
The transaction is expected to close in the first quarter of calendar 2020, following the receipt of required regulatory approvals and other customary closing conditions.