Holcim stalls Lafarge ‘mega-merger’

Lafarge HolcimThe planned merger between building materials giants Holcim and Lafarge to create the world’s biggest cement company has stalled after Holcim rejected the current terms.

Switzerland-based Holcim, which includes UK arm Aggregate Industries, revealed today it wants to renegotiate the terms of the merger “around the exchange ratio and governance issues”.

The merger had been billed as a merger of equals, with a one-to-one share exchange ratio giving both firms an equal stake in the combined entity initially proposed. The Financial Times reports this morning that Holcim now wants a greater share of the new firm.

Lafarge said in a separate statement it is willing to consider revising the share-exchange ratio but not other aspects of the deal, indicating it is willing to discuss at least a partial renegotiation with Holcim.

Bruno Lafont, chief executive of Lafarge, had been picked to lead the combined group although Holcim is also looking for a change in the management of the new company.

The rethink will impact on CRH’s separate deal to buy around £4.9 billion worth of assets to be disposed in the mega-merger, including Lafarge’s Tarmac business in the UK.

CRH was due to seek shareholder approval on 19 March to buy the Lafarge Holcim disposal assets. It said the firm would make a statement in due course.

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