Cement producer

Southdown

(SDW)

agreed to be acquired by Mexican cement giant

Cemex

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(CX) - Get Report

for a hefty $2.6 billion in cash plus debt.

Cemex will pay $73 a share in cash, a 33% premium over its closing price of $54.87 yesterday. That's a lot of rocks. The acquisition of Southdown, the largest cement producer in the U.S., marks Cemex's effort to expand its presence in the U.S. market. The acquisition includes $185 million in long-term debt, bringing the value of the deal to $2.8 billion.

The combined company will have over $6.3 billion in annual sales. Cemex also said its board approved a repurchase program of up to $500 million of the company's shares traded on the Mexican stock market. The repurchased shares will subsequently be canceled.

Southdown's president and CEO Clarence Comer will become president and CEO of the U.S. operations of the combined company.