Cemex paid $15B for Rinker weeks before the crash — and nearly defaulted on the debt

Cemex was Mexico's cement champion and one of the world's most acquisitive builders: a string of purchases in Spain, the UK, the US and Venezuela had made it one of the three largest cement companies on Earth. In October 2006 it announced its biggest deal yet — Australia's Rinker Group, for $12.8 billion. Rinker's board held out, and by April 2007 Cemex had raised its offer to $14.2 billion. The deal closed in June, financed with debt, at what Forbes later called the tail end of the building boom.

The timing could not have been worse, and the structure could not have been more fragile. Housing starts in the United States — Rinker's main market — collapsed, and with them the revenues that were supposed to service the acquisition debt. A falling Mexican peso and losing derivative bets widened the hole in 2008. By mid-2009 Cemex carried about $18 billion in debt, was in its second round of refinancing talks with its banks, and analysts were openly discussing default risk.

The unwind took years. The US Department of Justice had already forced the divestiture of more than forty plants on antitrust grounds; then came the sales — the Australian operations Cemex had just bought went to Holcim for $1.6 billion, a fraction of what Rinker had cost. Pieces of the acquisition were still being sold a decade later: the Rinker Materials pipe business went to Quikrete in 2016 for $500 million. The assets remained; the price paid for them was never recovered.