Cemex: The Southdown Offer

Cemex, a cement multinational from Mexico, has become one of the three largest cement companies in the world, through internal growth and a series of global acquisitions over the 1999 to 2000 period. It is a relatively small player in the United States with insignificant market share. It has had conflicts with the U.S. cement industry over its cement exports to the United States, being the object of a successful anti-dumping suit brought by the U.S. cement industry before the International Trade Commission. One of its key opponents is Southdown which has testified before the USITC against Cemex. Southdown's chief executive officer is unhappy with his firm's stock price and frustrated by the lack of market recognition despite profitable operations and growth. He is considering selling his company and has talked with Cemex about being acquired. The case allows students to analyze the strategic rationale for an acquisition of Southdown by Cemex, and has information to allow students to probe questions of strategic fit and value.