Lafarge ‘open’ to changing ratio in Holcim deal
Cement maker LafargeHolcim was formed this month in a Franco-Swiss tie-up. File photo: Reuters Cement maker LafargeHolcim was formed this month in a Franco-Swiss tie-up. File photo: Reuters
Geneva - Lafarge SA said it’s willing to consider revising the share-exchange ratio in its planned merger with Holcim Ltd of Switzerland, though it’s not willing to accept any other changes to the deal.
The French cement maker received a letter from Holcim on March 15 that said Holcim doesn’t intend to pursue the transaction under the terms agreed last July, Lafarge said in an emailed statement on Monday.
“Lafarge’s board of directors remains committed to the project that it intends to see implemented,” the Paris-based company said.
Holcim has proposed changes to the share-exchange ratio and management for a merger with France’s Lafarge SA as the two companies try to save a deal that would create the world’s biggest cement maker, according to people familiar with the matter. Under the original agreement, Holcim was planning a capital increase to create new shares and to give one of those to Lafarge in exchange for one share of the French company. Under the new proposal, Holcim would give 0.875 of a share in exchange for one Lafarge share, said the people, who asked not to be identified because negotiations are private.
Lafarge has signaled it will make a counter proposal that would trim its weighting to 0.93 to get the deal done, the people said. Holcim is also pushing for a change in management including the chief executive officer of the merged company, one of the people said. Bruno Lafont, the CEO of Lafarge, had been picked to lead the new entity.
Plans to combine Holcim and Lafarge were announced to great fanfare in April 2014, with the heads of both companies lauding the creation of a cement maker with sales of $40 billion and operations in 90 countries. Since then, Jona, Switzerland-based Holcim has outperformed Paris-based Lafarge on everything from sales to profit, prompting some investors in the Swiss company to call for a bigger stake in the new entity.
* With assistance from Aaron Kirchfeld and Andrew Noel in London and Jan-Henrik Forster in Zurich
Bloomberg