Cement merger in the mixer
April 7, 2014
Holcim and Lafarge said on Monday that the companies' supervisory boards and core shareholders had agreed to combine the two businesses in an all-share merger of equals.
The new company's chairman would be Swiss-based Holcim's Wolfgang Reitzle, with French-based Lafarge's Bruno Lafont becoming its Chief Executive Officer, they said in #link:http://www.holcim.com/merger:a joint statement#.
The firm would be based in Switzerland and listed in Zurich as well as in Paris, and would have combined sales to the tune of 32 billion euros ($43.8 billion) annually, the statement added.
As the merger would unite the cement market's two leaders, it is liable to prompt atitrust scrutiny in more than a dozen jurisdictions. The pairing said it was expecting to sell off assets worth some 5 billion euros to satisfy competition regulators.
Switzerland's Holcim was founded in 1912 and employs about 71,000 people in 70 countries around the world. France's Lafarge began as a limestone-quarrying company in 1833 and employs 65,000 workers in 64 countries. The two groups would complement each other well geographically, company executives told reporters in a conference call, with Lafarge being stronger in Africa and Lafarge boasting a big market share in Latin America.
“This is a once in a lifetime opportunity to deliver substantially better value to customers with more innovation, a wider range of products and solutions, as well as raise returns for shareholders,” said Holcim Chairman Rolf Soiron. Lafarge Chief Executive Bruno Lafont added that the combination would set up the most advanced group in the construction industry.
The news of the merger was welcomed on financial markets. Shares in Lafarge surged 4 percent at the open, becoming the top gainer on France's CAC 40 blue-chip index. Holcim shares even gained 5.4 percent. Moreover, the transaction boosted hopes for more mergers in the construction industry, sending the shares of German cement maker HeidelbergerCement 0.7 percent higher in early trading Monday.
uhe/msh (Reuters, AP, AFP)