Is it a good idea to merge? If so, what financial formula would suggest it is a good idea and why?

Exhibit 2. Cemex and Rinker Combined, 2006 (Millions of US dollars Cemex Rinker Combined Sales 18,2495.108 23.357 EBITDA 4,138 2,232 6,370 EBITDA margin 22.68% 43.70% 27.27% Net profit 2.378 744 3.122 Net profit margin 13.03% 14.56% 13.36% Change 28% 54% 31% Free Cash Flow (FCF) 2,689 611 3.300 23% FCF/EBITDA 64.98% 27.36% 51.80% Source: Constructed from published financial results. Note: Cemex's fiscal year ends Dec 31, whereas Rinker's fiscal year for 2006 closed on March 31, 2006, Exhibit 2. Cemex and Rinker Combined, 2006 (Millions of US dollars Cemex Rinker Combined Sales 18,2495.108 23.357 EBITDA 4,138 2,232 6,370 EBITDA margin 22.68% 43.70% 27.27% Net profit 2.378 744 3.122 Net profit margin 13.03% 14.56% 13.36% Change 28% 54% 31% Free Cash Flow (FCF) 2,689 611 3.300 23% FCF/EBITDA 64.98% 27.36% 51.80% Source: Constructed from published financial results. Note: Cemex's fiscal year ends Dec 31, whereas Rinker's fiscal year for 2006 closed on March 31, 2006