Europe: Lafarge and Holcim have agreed to new financial terms and leadership to save their merger plan after it came to the verge of collapsing. The deal is now expected to close in July 2015 and not June 2015 as previously expected.
The two agreed a new share-swap ratio of nine Holcim shares for each 10 of Lafarge and for Lafarge chief executive Bruno Lafont to become co-chairman instead of chief executive of the combined group as originally planned. Lafont's role was a major sticking point for Holcim, which threatened to abandon the deal if the terms were not renegotiated. Holcim questioned his ability to deliver the Euro1.4bn in promised cost savings from the deal and disliked his brash management style.
"My attitude since 15 March 2015 has been to show that men should not prevent this merger from going through and on the contrary should do everything to make it possible," said Lafont. Under the revised deal, Lafont will be co-chairman along with Holcim's chairman Wolfgang Reitzle. Lafont will propose a new CEO in the coming weeks, who will have to be accepted by Holcim's board. "This adjustment maximises the deal's chances of success," said Lafont, adding he was satisfied with the new terms and insisting that the deal was still a 'merger of equals.'
The new share-swap ratio means Holcim shareholders would own 55.6% of LafargeHolcim compared to 53% previously. The companies said that certain key shareholders of Lafarge and Holcim had confirmed their support for the revised merger terms. Nassef Sawiris, who owns 16% of Lafarge, said that he backed the deal and was not worried about Holcim shareholders not voting for it. In recent weeks, some Holcim shareholders pushed openly for changes to the deal because they saw it as a too favourable to Lafarge and argued that Holcim would be better off alone. In part to placate them, LafargeHolcim will pay a scrip dividend of one new LafargeHolcim share for each 20 existing shares after completion.
