Ciments Francais to be absorbed by Italcementi

Ciments Francais to be absorbed by Italcementi
Published: 17 February 2009

Italian cement group Italcementi will acquire the remaining stock it doesn’t already own in French affiliate Ciments Francais at an exchange premium of 12.9 per cent, the companies said Monday.

Italcementi will swap 8.25 of its shares for every one Ciments Francais share under the transaction.

In a conference call after the announcement, Ciments Francais Chief Executive Yves-Rene Nanot said the deal is beneficial for shareholders because it will preserve cash as there is no cash element in the deal. He also said that minority shareholders will hold 24 per cent of the group, versus 18 per cent currently.

The Italian group already owns about 82 per cent of Ciments Francais and the absorption of the French unit will be made under the cross-border merger directive of the European Union and French law, the companies said.

The new directive made the operation possible, Nanot said in the conference call, adding that it was accelerated by the current economic crisis.

"This contemplated merger would simplify the corporate structure of the Italcementi/Ciments Francais group, while it would not imply any modification in the industrial activities of Italcementi and its subsidiaries," the companies said in the statement.

The companies expect to complete the merger in the first quarter of this year.

Separately, Italian investment company Italmobiliare said in a statement that it would maintain control of Italcementi, with a stake that is expected at more than 47 per cent post-merger.

Concerning the evolution of the cement market, Nanot said that he did not expect a rebound this year and does not see an improvement in the US construction market in the first half of 2009.

"I don’t know when we will see the end of this trough. I don’t think we’ll see much in 2009," he said.

Following the merger, both the ordinary and savings shares of the new company will be listed on Euronext Paris and will remain listed on the Milan Stock Exchange. The merger does not envisage any cash disbursement and is aimed at achieving higher efficiency, unification and management focus, without affecting investment capabilities and growth prospects of the group, Italcementi said.

Shares in Ciments Francais, Italcementi and its holding company Italmobiliare were suspended from trading all day yesterday pending the release of a statement.