Venezuela Government Takes Over Building Materials Cos; Cemex Resists

The Venezuelan government has expanded its role in the construction industry after buying two of the country's top cement makers and seizing another as it seeks to shore up flagging public works projects. The seizure of local assets of Mexico's Cemex SAB (CX), which was unable to reach a price agreement with the government, also highlights Venezuela's strong- arm tactics when negotiating with its nationalization targets. The recent wave of acquisitions and seizures gives the state control over 90% of the country's cement production, according to government officials. The government will pay $267 million to France's Lafarge SA (LFRGY) for 89% of its local unit, and $552 million to Switzerland-based Holcim Ltd (HOLN.VX) for 85% of its subsidiary. Oil Minister Rafael Ramirez, who has been spearheading the negotiations with the cement makers, said late Monday that both Lafarge and Holcim welcomed the opportunity to stay in Venezuela with a minority stake and that both reached a ' friendly' agreement with the government. The situation is thornier for Cemex, the country's top cement producer. The government expropriated Cemex's assets at midnight Monday, and accused the company of environmental damages and avoiding tax payments. Some analysts say Cemex's situation is more complicated than that of Holcim or Lafarge because of recurrent diplomatic spats between Mexico - a U.S. ally - and President Hugo Chavez, Washington's most outspoken foe in Latin America.