No deal between Venezuela, Cemex on takeover

CARACAS, Venezuela (AP) - Venezuela's government said it was poised to seize a cement company owned by Mexico's Cemex SAB at midnight Monday after failing to reach a deal on terms for its nationalization.

Vice President Ramon Carrizalez said that cement producers Lafarge SA of France and Switzerland's Holcim Ltd agreed to nationalization terms for their subsidiaries in Venezuela, and agreed to stay on as minority partners.

But as for Cemex, "it hasn't been possible to reach an agreement,'' Carrizalez said.

"The period expires tonight, and the next step with this business is expropriation.''He said that midnight marks the end of a 60-day period for negotiating compensation laid out in a June presidential decree.

Chavez called it one of many "steps toward socialism,'' following his nationalization of telecommunications and electricity companies, the country's largest steel maker and major oil projects previously run by private oil companies.

"Tonight at midnight, we're going to take over the cement plants because the period is up today,'' Chavez said in a televised speech.

"The cement factories pass over to state hands.''

Venezuela agreed to pay US$267 million to Lafarge and US$552 million to Holcim in compensation within 60 days, Carrizalez said after the companies signed accords agreeing to the terms.

Venezuela will obtain an 89-percent share of Lafarge's business in Venezuela and an 85-percent share of Holcim's unit in the country, while the two companies will stay on as minority partners, Carrizalez said.

Cemex asked for more than US$1.3 billion in compensation, an amount "well above its real value,'' Carrizalez said.

The government is prepared to take over "operational control'' of Cemex's facilities in Venezuela at midnight Monday, Oil Minister Rafael Ramirez said.

"We're acting in accord with what's established in our laws,'' Ramirez said, adding the transfer of authority would be carried out similarly to the nationalization of key oil projects last year.

There was no immediate reaction from Cemex. Company spokesman Jorge Perez, in Monterrey, Mexico, said earlier that Cemex had no immediate comment.

Chavez, who did not attend the signing ceremony, pledged in a televised speech that state-run cement businesses will help bring down prices in Venezuela.

He called Venezuelan cement "the most expensive in the world,'' saying it has traditionally been because the companies "are in private hands and they set the price very high.''

Chavez's June 18 nationalization decree allows the 60-day negotiation period to be renewed by mutual consent, but stipulates that final transfer of control must happen by Dec. 31.

Venezuela had aimed to have at least 60 percent ownership in the new state-run cement businesses.

Before the deals were announced, Lafarge spokeswoman Claire Mathieu said in France that the company was "doing its best to protect the interests of its clients and staff'' in Venezuela.

Lafarge has operated in Venezuela since 1994 through its subsidiary Fabrica Nacional de Cementos SACA, which runs two cement plants and which accounted for 0.7 percent of Lafarge's total sales last year, according to the company's annual report.

Holcim spokesman Peter Gysel said before the signing ceremony that negotiations were continuing. He said the company hoped to achieve "a solution that is satisfactory to both sides.''

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