Shares of Mexican cement and buildings materials company Cemex SAB (CX) fell sharply Monday after the company said it plans to sell its Australian operations to Switzerland's Holcim Ltd (HOLN.VX) for around $1.63 billion.

Cemex CPO shares trading on the Mexican stock exchange were down 8.8% to 13.82 pesos ($1.03) around 11:10 a.m. EDT.

Cemex said late Sunday it has agreed to sell its Australian assets - 249 ready-mix concrete plants, 83 aggregates quarries, 16 concrete pipe and products plants, and its 25% stake in Cement Australia - for A$2.02 billion.

Carlos Hermosillo, an equities analyst at the Vector Casa de Bolsa brokerage, said the market reacted negatively to what it sees as an "economic crisis sale price."

Cemex acquired the Australian operations in 2007 with the $15.3 billion buyout of Rinker. The acquisition was followed by the U.S. housing slump and global economic downturn that hurt Cemex's earnings and its ability to pay down debt at the speed it had planned.

Cemex is currently negotiating to reschedule $14.5 billion in bank debt.

Hermosillo said the Australian sale, which represents about 80% of Cemex's divestment goal for this year, could help those negotiations along.

In addition to asset sales, Cemex is seeking to generate cost savings of $900 million this year, while cutting its capital expenditure to a maximum $650 million and lowering its debt. Cemex's net debt was $18 billion at the end of the first quarter.

In a report ahead of the sale announcement, Morgan Stanley said beyond what is expected to be a "fairly benign debt refinancing scenario," it sees little reason to own Cemex shares, which it rates "equal-weight."

"The slog toward 'normal operations' is going to take some time, with few positive catalysts in the medium term, in our view," Morgan Stanley said in a report.

Optimism about Cemex's progress in its debt renegotiation efforts has contributed to gains in the company's shares, which had risen the previous four sessions and are well above their low of MXN5.57 touched last November.

Also Monday, U.S. materials company Martin Marietta Materials Inc. (MLM) said it acquired from Cemex three quarries - in Nebraska, Wyoming and Utah - and a 49% stake in a joint-venture for $65 million.

-By Anthony Harrup, Dow Jones Newswires; (5255) 5001 5727; anthony.harrup@dowjones.com