The Cemex Way. What are the key success factors of the Cemex Way?

Academic Paper, 2021

8 Pages, Grade: 1,0


The Cemex Way

1) What is the Cemex Way?

The Cemex Way is in the essence of an incredibly fast-growing process that could be summarized (as a slogan) like: Stepping out (1992 Spanish acquisition in Europe), growing (1999 listing at NYSE) and finally stepping up (2005 acquiring RMC). This “journey”, that was once again topped 2007 with the merger of Rinker Australia has acquired and enormous amount of know-how and best practices(Lessard & Reavis, 2016).

The so-called CEMEX way is -in a nutshell- to identify know how and best practices and using standardized processes to roll them out on a global scale. Or from an IT point of view: collecting data, re-engineering the data flow according to the best practices and nourish innovation.

2) What are the key success factors of the Cemex Way?

One has to think of Polonius in Shakespeare’s Hamlet: “…(“To Thine Own Self Be True”, Meaning & Context, 2019), the point here is not only to accumulate a lot of knowledge in a global scale, but to make sense of it and make sure that the best solution will be implemented and that might be not automatically the way “things are done in Mexico”.

While with the first overseas acquisition 1992 in Spain some cultural advantages -besides the language- might have played a role (“Country Comparison,” n.d.-b), CEMEX would have never succeeded if they wouldn’t have listen to the people in the newly acquired companies. For example, during the merger with RMC CEMEX executives spend 16 hours to their new French colleagues to understand why certain things are done differently in France. CEMEX has set up very robust process and visualized them with the ARIS process mapping of Prof Scheer (“Scheer GmbH,” n.d.) and as the knowledge base grew and the processed became more complex (and dynamic maybe) having processes and the discipline to follow that systems while not neglecting or ignoring new knowledge (of just acquired companies for example) turned out to key to success. As seen besides a PMI there is something like a Pre-merger integration: CEMEX sent teams out to better understand their new acquisitions and craft how acquisitions to integrate them even before the actual transaction. The speed of CEMEX, the discipline goes hand in hand with -sometimes at least- being reckless (to quote Mr. Zambrano in regards to the 199 acquisition and integration of Valenciano and Sanson).

3) How does the PMI in Cemex work?

When looking at how the CEMEX way actually is being executed the word “blitzkrieg” comes to the mind of some writers (Lessard & Reavis, 2016). Firstly, a Very in-depth analysis of the “target”, swift action and smaller “commandos” i.e., teams that swarm out to have immediately “boots on the ground” meaning unfiltered access to information in the newly acquired firm. This teams (which consists of season PMI experts) will also identify change agents in the new companies to help implementing the “CEMEX way”, at the same time best practices are being collected and fed in the process mapping in real time.

Local people are encouraged to put forward ideas to “cross country evolution networks” that again help to identify best practices (this time from the perspective of the local workforce). It is notable that the word “evolution” and not “revolution” is used here by CEMEX, which underlines their data driven , rational and disciplined approach to PMIs.

4) Could Cemex Way to be considered as an example of best practices in integration processes?

The CEMEX way might be taken one possible way to go for vertical integration. With all due respect for the achievements of CEMEX integrating different firms that basically do a pretty common products might be less complicated. Besides it would be interesting how CEMEX performed in current crisis compared to other players in that industry. During the financial crisis CEMEX (with all the accumulated debts) was near bankruptcy (Cemex Struggles To Lighten Debt Load, n.d.), how died companies like Vulcan Materials or James Hardie or HeidelbergerCement go through that same (financial) crisis? On the one hand the company is “ruthless” to streamline processes and help finding saving opportunities (Johnson, 2018) on the other hand CEMEX claims that 80% of the cost efficiency project don’t result from head count reduction. There is -unfortunately- little to no research on how people at CEMEX feel about “virtual inspections’ for example by Mr. Zambrano. If feelings don’t count, how is the retention rate at CEMEX? Or what does a 4 star rating at a homepage like “Glassdoor” actually mean(Working at CEMEX, n.d.)

5) What role should communication play in the PMI process?

Before engaging in communication, one firstly has to run a stakeholder analysis to understand to who the company would have to communicate in which channels and which content should be communicated. In the case of CEMEX, the obvious stakeholders are:

- Investors
- Employees of CEMEX
- Government bodies that might support / hinder a successful post-merger integration.

As seen in the CEMEX case pre-merger integration starts when talking to local antitrust authorities and investors as early as possible.

As of the format of real PMI communications, nowadays one would like to see the topmangagement interacting in a townhall meeting after the acquisition and make full use of the social media channels. One example here might be on of such meeting held by CEMEX USA and announced on Twitter(CEMEX USA, 2019).

As of the workforce of the acquired organization they are mainly three concerns or fears that need to be addressed in a right way(Elliott, 2020):

- Losing the job
- Trust in new leadership
- Being unfit for the “new culture”

This fear needs to be overcome in order to stabilize the newly acquired company and get “back to normal” as soon as possible. As seen in other cases to move outstanding people of the newly acquired company to the head quarter of the new parent company might fight two purposes(Kanter, 2009):

- Show appreciation of new team members
- Enable the people of the acquired company to learn about the culture of the new mother company through people they trust.

Kanter gives here a vivid example of the Gilette acquisition by P&G.

6) Compare Cemex’s example with other integration processes you know

To stay in the same industry, it might be valuable to look at the merger of Lafarge Holcim. In that specific case the integration especially on the Indian side was delayed by more than one year(Bedi & Vij, 2019), because of antitrust concerns on the subcontinent. So, coming back to how important communication is, this merger was and the post-merger integration was further more economically challenged by a strong Swiss franc. At the same time from a investors point of view one may wonder why competitors like Anhui Conch has a higher output per factory or in other words: What did Lafarge actually want to achieve by buying Holcim? The severe competition led to mounting pressures on the cost side which resulted in a lay off in the Swiss headquarter of 130 persons. So, this similar company did not manage to achieve any synergies and didn’t seem to have done enough research prior to the acquisition.

In terms of the cultural aspect of M&A Daimlers acquisition of the US carmaker Chrysler or Mitsubishi might give another negative example of PMI that didn’t work out / didn’t create any value to the share- and stakeholders at all.


Excerpt out of 8 pages


The Cemex Way. What are the key success factors of the Cemex Way?
Catalog Number
ISBN (eBook)
CEMEX, CEMEX WAY, best practice, key success factors, PMI, Post merger integration
Quote paper
Guenther Klein (Author), 2021, The Cemex Way. What are the key success factors of the Cemex Way?, Munich, GRIN Verlag,


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