Holcim, Lafarge map year-long merger, expedited asset sale plans

Sources: Holcim Ltd., Zurich; Lafarge SA, Paris; CP staff

Holcim and Lafarge officials outlined in April 7 presentations to European Union analysts the financial rationale and integration strategies behind a “merger of equals,” netting LafargeHolcim—present in 90 countries and accounting for $44 billion in sales; 470 million and 384 million tons of cement and aggregate shipments, respectively; plus, 90 million yd. of ready mixed production.

They told analysts in Zurich and Paris their strategy, unfolding with an eye toward a mid-2015 1:1 share exchange consummating the merger, calls for creation of joint integration and divestment committees. Work of the latter will be aimed at identifying assets representing up to $7 billion in sales, disposals tied to gaining regulatory approvals in countries where LafargeHolcim would have concentrated presence.

In North America, Holcim and Lafarge overlap throughout Great Lakes markets. Concentration of integrated cement and concrete businesses peaks in Ontario and Quebec; in the U.S., both are principal cement sources from Boston to Chicago, production and distribution strongest in New York and Michigan.

“This proposed merger is a once in a lifetime opportunity to deliver substantially better value to customers with more innovation, a wider range of products and solutions, and enhanced returns to shareholders,” says Holcim’s Rolf Soiron, who will remain chairman and co-chair the integration committee in advance of chairman-elect, Wolfgang Reitzle, carrying the title upon LafargeHolcim charter.

“LafargeHolcim will be uniquely positioned to take advantage of growth in developed markets and the world’s fastest growing economies … Both companies put customers and staff development first to ensure that the new group can deliver best in class operational excellence.”

“By combining Holcim’s experienced teams, complementary geographies and innovative expertise with ours, we propose to set up the most advanced group in the construction industry, for the benefit of our clients, employees and shareholders,” adds Lafarge Chairman and CEO Bruno Lafont, designated LafargeHolcim CEO. “With a best in class international portfolio, robust balance sheet and strong governance, the new group will offer higher growth and low risk, thus creating more value.”