ISS backs LafargeHolcim deal

ISS backs LafargeHolcim deal
Published: 22 April 2015

US shareholder adviser ISS has recommended that Holcim investors back the Swiss cement maker's proposed merger with Lafarge ahead of next month's shareholder vote on the tie-up.

Backing from ISS is a boost Holcim as it seeks to win the support of two-thirds of investors at a shareholder meeting on 8 May 2015 to approve a capital increase to fund the proposed deal.

ISS said in its report to investors that the deal warranted investors' support as it had a clear strategic rationale and offered upside to Holcim investors through synergies, according to a report by Reuters. However, the shareholder adviser stressed that a successful integration of the two companies under the combination's proposed chief executive was key.

"The companies are betting that American Eric Olsen will bridge the cultural gap," ISS said in the report, dated 20 April.

"But Olsen is untested in the role at either of these firms, let alone at the task of integrating them into the world's largest cement company. It may well be that execution on the operational and strategic fronts is slowed until the cultural issues are resolved."