Holcim and Lafarge cement new merger deal
Swiss-based Holcim and French-based Lafarge say they have repaired cracks that threatened to collapse their merger to create the world's biggest cement company.
"The Boards of Directors of Holcim and Lafarge are pleased to announce that they have reached an agreement on revised terms for the merger of equals between both companies," the said in a joint statement released on Friday.
Last year the two companies announced plans to create a cement titan employing more than 130,000 people, which would generate annual sales of €32 billion euros ($34 billion) and underlying profits of €6.5 billion — a major event in the global construction industry.
But with the sharp rise in the Swiss franc having driven up Holcim's value since the merger was agreed last year, the Swiss company said on Sunday that the terms of one Holcim share for one Lafarge share was no longer appropriate.
The companies agreed on a new exchange ratio of nine Holcim shares for ten Lafarge shares, although this is not as favourable as the Swiss company had sought.
Holcim's bid to sideline the chief executive of France's Lafarge, Bruno Lafont, one of the architects of the merger, only partially succeeded.
Holcim's executives apparently didn't appreciate Lafont's hands-on and centralized management style, and he agreed to give up the chief executive post to ensure the merger went forward.
Instead Lafont and Holcim board chairman Wolfgang Reitzle will both become non-executive co-chairmen of the merged company's board.
Lafarge will soon propose a candidate for chief executive, to be accepted by Holcim's board, the companies said the statement.
Lafarge shares shot up 3.0 percent to 64.16 in midday trading while Paris' CAC 40 index was up 0.52 percent overall.
Holcim's shares rose 0.92 percent to 76.50 francs while the Swiss SMI index showed a gain of 0.32 percent.