CARACAS — Venezuela Venezuela’s government seized control of cement plants owned by Mexico’s Cemex SAB after failing to reach a deal on compensation terms, marking President Hugo Chavez’s latest move to nationalize key sectors of the economy.
The Caracas Stock Exchange temporarily halted trading in local shares of Cemex’s Venezuelan subsidiary on Tuesday, while the company declined on U.S. and Mexican stock markets.
Government officials backed by national guard troops took control of Cemex’s local plants late Monday night, after a 60-day period for negotiating compensation expired. Mr. Chavez had established the timeframe in a June nationalization decree.
Celebrating Venezuelan workers gathered at Cemex plants across the country as a deadline for talks expired at midnight, singing the national anthem while fireworks lit up the sky.
Oil Minister Rafael Ramirez raised a fist in the air while hundreds waved flags and cheered at a Cemex plant in Venezuela’s eastern state of Anzoategui.
“We’re taking over operations,” Mr. Ramirez said. “With Cemex, regrettably, we couldn’t reach an agreement.”
Two other cement companies, Lafarge SA of France and Switzerland’s Holcim Ltd, signed agreements Monday to sell majority stakes in their Venezuelan units to the government and stay on as minority partners.
Mr. Chavez planned to sign a decree formalizing his government’s expropriation of the Cemex plants later on Tuesday, Mr. Ramirez said.
The leftist president has called the cement companies’ nationalization one of several “steps toward socialism,” which include the takeover of the country’s largest telephone and electricity companies, its largest steel maker and a handful of major oil projects since his re-election in December 2006.
Cemex says its Venezuelan assets include three cement plants, 30 smaller concrete plants, a shipping terminal and other facilities. It acknowledged Venezuela’s move to assume control of its plants in a statement, but declined further comment.
Because the government has struck no deal with Cemex, it is still unclear how much it will pay minority stakeholders for their shares.
Please read our comment policy before commenting.