Lorenzo Zambrano, Cemex Chief Who Led Buying Spree, Dies at 70
2014-05-13 05:00:00.15 GMT
By Brendan Case and Ben Bain
May 13 (Bloomberg) -- Lorenzo Zambrano, who built Cemex SAB
into the biggest cement producer in the Americas with a two-
decade, $29 billion buying spree and then saw the Mexican
company flirt with default, has died at 70.
Zambrano died of natural causes in Madrid yesterday, a
spokesman, Francisco Lebrija, said by telephone. Cemex’s board
will meet in the coming days, and business operations are
continuing normally, the Monterrey, Mexico-based company said in
a filing.
Acquisitions and international expansion marked Zambrano’s
career as chief executive officer starting in 1985, capped by
the $14.2 billion purchase of Rinker Group Ltd. in 2007 just as
the U.S. housing market was collapsing. The growth proved
unsustainable and in 2009, Cemex almost defaulted on $21.7
billion in debt and had to accept lenders’ terms that included a
halt to the company’s dealmaking.
“He did great things for Mexico and he put Cemex on the
map as one of the major companies in the country,” Luis Maizel,
who manages about $5.4 billion in assets including Cemex bonds
as president of San Diego-based LM Capital Group LLC, said in a
telephone interview. “But at the same time, I think he did not
measure his risks carefully and embarked, especially with the
Rinker acquisition, on a little bit of a folly to prove that he
could do it. And they overpaid.”
Succession Process
Zambrano, who has served as Cemex’s chairman since 1995,
was the longest-tenured CEO at a major Mexican industrial
company and one of the country’s most prominent business
leaders. Tributes immediately began pouring in from political
leaders including President Enrique Pena Nieto as well as
investors and analysts.
“Mexico has lost an extraordinary businessman and a great
Mexican,” Finance Minister Luis Videgaray said in a message
posted on his Twitter account.
Zambrano served as a director at many companies, and was on
boards including that of International Business Machines Corp.
at the time of his death. Past board memberships include Grupo
Televisa SAB, Alfa SAB, Vitro SAB, Fomento Economico Mexicano
SAB and Citigroup Inc.’s Banamex unit, Cemex said in a
statement.
With no chief operating officer or publicly anointed
successor, Cemex’s board will turn to the task of replacing a
CEO whose stint at the helm spanned six Mexican presidential
administrations and the 1994 North American Free Trade
Agreement. The company, with more than 43,000 employees,
operates in 50 countries.
Company Meeting
Zambrano was in Madrid for a company meeting, Lebrija said
yesterday. Mexico City-based daily Reforma reported yesterday on
its website that Zambrano died of a heart attack in his hotel
room, without saying how it obtained the information.
Senior management at the 108-year-old cement maker includes
Chief Financial Officer Fernando Gonzalez and six presidents for
regions such as the U.S., Mexico and Northern Europe, according
to data compiled by Bloomberg. Francisco Garza is an adviser to
the CEO on institutional relations.
While Cemex probably has a strategy to continue operations,
“there is likely to be a certain amount of volatility” in the
shares due to Zambrano’s death, according to Fernando Bolanos, a
Monex Casa de Bolsa analyst who has a hold recommendation on the
shares.
Cemex has advanced 12 percent this year, the fifth-biggest
gain on Mexico’s benchmark IPC index of 35 stocks, bolstered by
a global building rebound. First-quarter sales rose 8.2 percent
to $3.59 billion as cement volumes rose in all its regional
markets. Shares rose 1.4 percent yesterday to 16.50 pesos in
Mexico City before the company announced Zambrano’s death.
String of Losses
Strengthening operations in the U.S. and Mexico will
bolster 2014 earnings, Zambrano said at a March press conference
in Monterrey before Cemex’s annual meeting. The company has
posted 18 consecutive quarterly losses following the global
economic downturn and U.S. housing bust.
“As the world economy recovers, Cemex will recover,”
Carlos Legaspy, who oversees about $350 million in emerging-
market debt at InSight Securities Inc., said in a telephone
interview from Chicago. Cemex was Mexico’s first truly
multinational corporation, he said.
Zambrano was born on March 27, 1944, in Monterrey, Mexico,
according to Marquis Who’s Who. In 1968 he earned a master of
business administration degree from Stanford University in
California, and joined Cemex that year. He has been involved in
all aspects of the company’s business and became director of
operations in 1981, according to Cemex. He was not married.
Pizzas, Ferraris
Known as a technology enthusiast, he had long been able to
monitor production details on dozens of Cemex plants around the
world -- down to the temperature of a cement kiln -- through a
laptop. He studied pizza chains and emergency call centers to
learn how to make delivery times for ready-mix concrete more
reliable.
Zambrano was also a top collector of Ferrari cars, with
antiques from the 1950s and 1960s, and would race them at Pebble
Beach, California, according to a Stanford business school
profile.
As the grandson of the 108-year-old company’s founder, he
was determined to leave a lasting legacy following his
leadership of the company.
“The true measure of a business leader,” he said in the
Stanford article, “is if the company lasts through time.”
For Related News and Information:
Cemex Says Debt Terms Create ‘Nightmares’ of Missing Mergers
NSN L418D70D9L35 <GO>
Cemex Gains Amid Talks on Extending 2009 Loan Agreement
NSN M66WCC6VDKHS <GO>
Cemex Holders See Higher Rating as Housing Gains: Mexico Credit
NSN MJNUMF6TTDU5 <GO>
Cemex Extends $14.2 Billion Offer for Rinker Group
NSN JK0B0E1A1I4H <GO>
--With assistance from Charles W. Stevens in New York, Patricia
Laya, Adam Williams and Jonathan Roeder in Mexico City and
Thomas Black in Dallas.
To contact the reporters on this story:
Brendan Case in Mexico City at +52-55-5242-9284 or
bcase4@bloomberg.net;
Ben Bain in Mexico City at +52-55-5242-9256 or
bbain2@bloomberg.net
To contact the editors responsible for this story:
Ed Dufner at +1-214-954-9453 or
edufner@bloomberg.net
Jonathan Roeder, Stephen West
2014-05-13 05:00:00.15 GMT
By Brendan Case and Ben Bain
May 13 (Bloomberg) -- Lorenzo Zambrano, who built Cemex SAB
into the biggest cement producer in the Americas with a two-
decade, $29 billion buying spree and then saw the Mexican
company flirt with default, has died at 70.
Zambrano died of natural causes in Madrid yesterday, a
spokesman, Francisco Lebrija, said by telephone. Cemex’s board
will meet in the coming days, and business operations are
continuing normally, the Monterrey, Mexico-based company said in
a filing.
Acquisitions and international expansion marked Zambrano’s
career as chief executive officer starting in 1985, capped by
the $14.2 billion purchase of Rinker Group Ltd. in 2007 just as
the U.S. housing market was collapsing. The growth proved
unsustainable and in 2009, Cemex almost defaulted on $21.7
billion in debt and had to accept lenders’ terms that included a
halt to the company’s dealmaking.
“He did great things for Mexico and he put Cemex on the
map as one of the major companies in the country,” Luis Maizel,
who manages about $5.4 billion in assets including Cemex bonds
as president of San Diego-based LM Capital Group LLC, said in a
telephone interview. “But at the same time, I think he did not
measure his risks carefully and embarked, especially with the
Rinker acquisition, on a little bit of a folly to prove that he
could do it. And they overpaid.”
Succession Process
Zambrano, who has served as Cemex’s chairman since 1995,
was the longest-tenured CEO at a major Mexican industrial
company and one of the country’s most prominent business
leaders. Tributes immediately began pouring in from political
leaders including President Enrique Pena Nieto as well as
investors and analysts.
“Mexico has lost an extraordinary businessman and a great
Mexican,” Finance Minister Luis Videgaray said in a message
posted on his Twitter account.
Zambrano served as a director at many companies, and was on
boards including that of International Business Machines Corp.
at the time of his death. Past board memberships include Grupo
Televisa SAB, Alfa SAB, Vitro SAB, Fomento Economico Mexicano
SAB and Citigroup Inc.’s Banamex unit, Cemex said in a
statement.
With no chief operating officer or publicly anointed
successor, Cemex’s board will turn to the task of replacing a
CEO whose stint at the helm spanned six Mexican presidential
administrations and the 1994 North American Free Trade
Agreement. The company, with more than 43,000 employees,
operates in 50 countries.
Company Meeting
Zambrano was in Madrid for a company meeting, Lebrija said
yesterday. Mexico City-based daily Reforma reported yesterday on
its website that Zambrano died of a heart attack in his hotel
room, without saying how it obtained the information.
Senior management at the 108-year-old cement maker includes
Chief Financial Officer Fernando Gonzalez and six presidents for
regions such as the U.S., Mexico and Northern Europe, according
to data compiled by Bloomberg. Francisco Garza is an adviser to
the CEO on institutional relations.
While Cemex probably has a strategy to continue operations,
“there is likely to be a certain amount of volatility” in the
shares due to Zambrano’s death, according to Fernando Bolanos, a
Monex Casa de Bolsa analyst who has a hold recommendation on the
shares.
Cemex has advanced 12 percent this year, the fifth-biggest
gain on Mexico’s benchmark IPC index of 35 stocks, bolstered by
a global building rebound. First-quarter sales rose 8.2 percent
to $3.59 billion as cement volumes rose in all its regional
markets. Shares rose 1.4 percent yesterday to 16.50 pesos in
Mexico City before the company announced Zambrano’s death.
String of Losses
Strengthening operations in the U.S. and Mexico will
bolster 2014 earnings, Zambrano said at a March press conference
in Monterrey before Cemex’s annual meeting. The company has
posted 18 consecutive quarterly losses following the global
economic downturn and U.S. housing bust.
“As the world economy recovers, Cemex will recover,”
Carlos Legaspy, who oversees about $350 million in emerging-
market debt at InSight Securities Inc., said in a telephone
interview from Chicago. Cemex was Mexico’s first truly
multinational corporation, he said.
Zambrano was born on March 27, 1944, in Monterrey, Mexico,
according to Marquis Who’s Who. In 1968 he earned a master of
business administration degree from Stanford University in
California, and joined Cemex that year. He has been involved in
all aspects of the company’s business and became director of
operations in 1981, according to Cemex. He was not married.
Pizzas, Ferraris
Known as a technology enthusiast, he had long been able to
monitor production details on dozens of Cemex plants around the
world -- down to the temperature of a cement kiln -- through a
laptop. He studied pizza chains and emergency call centers to
learn how to make delivery times for ready-mix concrete more
reliable.
Zambrano was also a top collector of Ferrari cars, with
antiques from the 1950s and 1960s, and would race them at Pebble
Beach, California, according to a Stanford business school
profile.
As the grandson of the 108-year-old company’s founder, he
was determined to leave a lasting legacy following his
leadership of the company.
“The true measure of a business leader,” he said in the
Stanford article, “is if the company lasts through time.”
For Related News and Information:
Cemex Says Debt Terms Create ‘Nightmares’ of Missing Mergers
NSN L418D70D9L35 <GO>
Cemex Gains Amid Talks on Extending 2009 Loan Agreement
NSN M66WCC6VDKHS <GO>
Cemex Holders See Higher Rating as Housing Gains: Mexico Credit
NSN MJNUMF6TTDU5 <GO>
Cemex Extends $14.2 Billion Offer for Rinker Group
NSN JK0B0E1A1I4H <GO>
--With assistance from Charles W. Stevens in New York, Patricia
Laya, Adam Williams and Jonathan Roeder in Mexico City and
Thomas Black in Dallas.
To contact the reporters on this story:
Brendan Case in Mexico City at +52-55-5242-9284 or
bcase4@bloomberg.net;
Ben Bain in Mexico City at +52-55-5242-9256 or
bbain2@bloomberg.net
To contact the editors responsible for this story:
Ed Dufner at +1-214-954-9453 or
edufner@bloomberg.net
Jonathan Roeder, Stephen West