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Taking a Mexican Company Global?The CEMEX Way
Venkataraman, S.; Allayannis, George (Yiorgos); Yemen, Gerry Case S-0194 / Published December 5, 2011 / 27 pages.
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Product Overview

Suitable for MBA, Executive MBA, GEMBA, and executive education programs, this case uses CEMEX, a global cement producer based in Mexico, to set the stage for unfolding an analysis of a growth through acquisition strategy. It offers a discussion about the firm's overall strategy to acquire on a global scale instead of growing organically and provides an opportunity to introduce basic financial, marketing, and operational terms that can be explored in subsequent classes. The material includes a PMI process that further allows discussion on that technique. The case opens with a conference call and another barrage of questions for CEO Lorenzo Zambrano about his bid to buy the Australia-based Rinker Group in October 2006. Until this point, CEMEX has had a long-standing habit of buying businesses in emerging markets; this acquisition would be a departure from that strategy. If the deal goes through, it would be the single largest acquisition in CEMEX's history, and it would be among its few forays into a developed market other than the neighboring United States. The company has grown exponentially and successfully. Why would this effort be any different? Was the acquisition a good idea or not? And if it was, how would Zambrano and his leadership team convince Wall Street and others of that?

Learning Objectives

Discover the intricacies and advantages and disadvantages of articulating strategies. Understand competitive advantage in a global context. Develop skills in examining a firm's capabilities Explore M&A and post-merger-integration issues. Introduce concepts around financial derivatives and hedging Introduce concepts around people, process, and systems

  • Overview

    Suitable for MBA, Executive MBA, GEMBA, and executive education programs, this case uses CEMEX, a global cement producer based in Mexico, to set the stage for unfolding an analysis of a growth through acquisition strategy. It offers a discussion about the firm's overall strategy to acquire on a global scale instead of growing organically and provides an opportunity to introduce basic financial, marketing, and operational terms that can be explored in subsequent classes. The material includes a PMI process that further allows discussion on that technique. The case opens with a conference call and another barrage of questions for CEO Lorenzo Zambrano about his bid to buy the Australia-based Rinker Group in October 2006. Until this point, CEMEX has had a long-standing habit of buying businesses in emerging markets; this acquisition would be a departure from that strategy. If the deal goes through, it would be the single largest acquisition in CEMEX's history, and it would be among its few forays into a developed market other than the neighboring United States. The company has grown exponentially and successfully. Why would this effort be any different? Was the acquisition a good idea or not? And if it was, how would Zambrano and his leadership team convince Wall Street and others of that?

  • Learning Objectives

    Learning Objectives

    Discover the intricacies and advantages and disadvantages of articulating strategies. Understand competitive advantage in a global context. Develop skills in examining a firm's capabilities Explore M&A and post-merger-integration issues. Introduce concepts around financial derivatives and hedging Introduce concepts around people, process, and systems