CX Cemex SaB De Cv

MEXICO CITY—Mexican cement and building materials company Cemex SAB took another step toward meeting its asset-divestment target with an agreement to sell a cement plant and terminal in Ohio to Eagle Materials Inc. for about $400 million.

The sale, which is expected to close in the fourth quarter, includes a cement plant in Fairborn and a distribution terminal in Columbus, Cemex said Monday.

The assets are expected to generate $79 million this year in revenue, and $33 million in operating cash flow measured by earnings before interest, taxes, depreciation and amortization, or Ebitda.

Cemex said it would use the money from the sale to pay down debt and for other purposes. The Monterrey company, one of the world's largest cement makers, is selling assets to reduce its heavy debt load as it seeks to recover the investment-grade ratings that it lost during the 2008-2009 global crisis.

Cemex aims to sell assets for $1.5 billion to $2 billion in 2016-2017. The sales are part of the company's plans to lower debt by between $3 billion and $3.5 billion in that two-year period. It recently agreed to sell plants in Texas and New Mexico to Grupo de Cementos Chihuahua SAB for $306 million.

Dallas-based Eagle Materials said the Fairborn cement plant has capacity to grind nearly one million tons a year of clinker, and will increase its cement-making capacity by about 20%. Eagle said the acquisition will contribute to earnings as soon as the deal closes, and that it expects around $50 million in tax benefits from the transaction.

"Our strategy has been to grow the cement side of our business. The Fairborn plant extends our U.S. cement system and connects but does not overlap with the market reach of our existing plants," said Dave Powers, Eagle's president and chief executive in a statement from the company.

Eagle, which makes cement and other building materials, said it would use cash and bank credit to finance the acquisition without raising its debt-to-Ebitda ratio to more than two times.

The sale is positive for Cemex even though it is in one of its biggest and currently fastest-growing markets, analysts at Mexico's Intercam brokerage said in a note to clients.

The assets are far from Cemex's main areas of operations in the U.S., and don't produce concrete or aggregates. "Besides, it's core for Eagle Materials so they could pay a higher multiple," they added.

Write to Anthony Harrup at anthony.harrup@wsj.com

(END) Dow Jones Newswires

September 12, 2016 14:05 ET (18:05 GMT)

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