Lafarge and Holcim agree on revised terms

Lafarge and Holcim agree on revised terms
Published: 20 March 2015

Lafarge and Holcim are back on track with their proposed merger having reached an agreement on revised terms for the deal.

Holcim demanded new terms earlier this week, stating that the merger could no “longer be pursued in its present form and has proposed to enter into negotiations in good faith around the exchange ratio and governance issues."

Under the new terms confirmed today, both parties agreed on a new exchange ratio of 9 Holcim shares for 10 Lafarge shares.

The companies have also now said that Lafarge CEO Bruno Lafont will become co-chairman of the combined group, instead of chief executive as originally planned. A new CEO for the combined entity – to be proposed by the Lafarge Board and accepted by the Holcim Board – will be appointed as from the closing of the transaction, according to a statement by the companies.

Wolfgang Reitzle, chairman of Holcim, said: “I am very pleased that we are now able to proceed with our project to create a truly outstanding global leader in building materials. Bruno Lafont and I will work closely together to ensure that the value creation potential of this merger will be realised for the benefits of all shareholders. I want to highlight that Bruno has made a tremendous contribution to getting us this far and that I am very confident in our ability to work together in the new Board.”

 Bruno Lafont, chairman and CEO of Lafarge, said: “We are crafting a new leader in the building materials industry focusing on customers and innovation. The new company will gather best-in-class teams of our sector with the strength of our two combined companies. It creates a new business model with outstanding cash flow generation capabilities and reduced capital intensity.”

The groups also said that certain key shareholders of both companies had confirmed their support for the revised merger terms, without naming those shareholders.

The parties expect the transaction to close in July 2015.