|Cement heavyweights create global supplier raking in 32b euros annual sales
Swiss cement group Holcim and French rival Lafarge are to merge creating a dominant supplier of cement for concrete to the global construction industry.
The deal, described in a statement today as “a merger of equals,’’ and a major event in the global construction industry, will be based on the offer of one Holcim share for one Lafarge share.
The two groups made a commitment to sell assets to pre-empt anti-trust objections from competition authorities, AFP reports.
On the Swiss stock market, the price of Holcim shares jumped 5.24 percent to 84.40 Swiss francs in initial trading and in Paris, Lafarge shares were up 4.57 percent to 67.02 euros. Their stocks had already reacted to rumors of merger talks on Friday.
The new company will be called LafargeHolcim and “will have a unique position in 90 countries and will be evenly balanced between developing countries and countries with strong growth,'' the companies said in a join statement.
Figures in the statement show that the new giant will employ 136,000 people.
Holcim Chairman Rolf Soiron said the merger offered “a once in a lifetime opportunity to deliver substantially better value to customers with more innovation, a wider range of products and solutions,’’ and to improve returns for shareholders.
Lafarge chief executive Bruno Lafont said the companies would “set up the most advanced group in the construction industry, for the benefit of our clients, our employees and our shareholders.''
The new entity would have annual sales of 32 billion euros and underlying profits on a basis of earnings before interest, tax depreciation and amortisation, of 6.5 billion euros.
The deal was expected to generate economies of scale of 1.4 billion euros over three years.
The deal had the unanimous support of both boards and of core shareholders.
The new firm's chairman will be Holcim's Wolfgang Reitzle, with Lafarge's Lafont becoming its chief executive officer.
Holcim and Lafarge will each has seven seats on the new board.
Founded in Switzerland in 1912, Holcim employs 71,000 people, with production sites in about 70 countries and a market presence on every continent.
In notched up net sales of 19.7 billion Swiss francs in 2013.
Lafarge began as a French limestone-quarrying company in 1833, and now employs 65,000 people in 64 countries, with annual sales of 15.8 billion euros.