Displaying items by tag: Holcim
Holcim to sell off Siam City Cement stake
27 March 2015Thailand: Swiss cement maker Holcim Ltd has launched an up to US$741.4m selldown of shares in Thailand's second-largest cement company Siam City Cement (SCC). Holcim is selling 63.3 million SCC shares through its Thai Roc-Cem Ltd unit at an indicative range of between US$10.73 and US$11.68, according to Thomson Reuters.
Europe: Lafarge has identified two potential chief executive candidates for LafargeHolcim, according to local media. Lafarge chief financial officer Jean-Jacques Gauthier and vice president Eric Olsen have both been named. The companies need to find a new chief executive after Holcim demanded a change to the initial agreement that would have installed Lafarge chief Bruno Lafont as head of LafargeHolcim.
Mexico: Holcim has announced plans to reduce its water consumption by 14% year-on-year in 2015 in Mexico. It has invested US$332,167 in the initiative and has installed meters at all of its cement plants. The installation was carried out to reduce the business's operational water footprint.
LafargeHolcim merger back on track after revised terms
20 March 2015Europe: 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.
CRH assumes LafargeHolcim merger will proceed
19 March 2015Europe: Ireland's CRH is assuming that the LafargeHolcim merger will still happen, according to CRH chief executive Albert Manifold. "At this moment in time, we're working forward on the basis that the deal will close, the merger will happen," said Manifold. He added that he had spoken to both companies on 19 March 2015.
CRH has agreed to buy a number of mostly European assets from Lafarge and Holcim for Euro6.5bn so that Lafarge and Holcim can get antitrust clearance for their plan to merge. According to Reuters, CRH's shareholders voted to approve the acquisition on 19 March 2015 at its extraordinary general meeting. According to Manifold, the CRH vote was a procedural step that had to be done, regardless of the uncertainty at Lafarge and Holcim, as a failure to approve the asset purchase would have left CRH exposed to a potential Euro158m break-up fee.
Manifold also confirmed that if the merger should fail, the break-up fee would apply in the other direction. "Likewise, if other parties don't conclude this deal for whatever reason, we would then be in receipt of a break fee," said Manifold. "I'm not going to speculate on whether it is or isn't going to happen. There are discussions going on to decide what they want to do over the next couple of days," said Manifold, adding that CRH was interested in buying the assets even if the merger falls through.
According to CRH, the LafargeHolcim assets would transform CRH into the world's third-largest building materials supplier, the biggest in central and eastern Europe, and double its presence in emerging markets. CRH makes about half its sales in the US and wants more exposure to new markets such as the Philippines and parts of Europe it believes are beginning to recover.
Manifold said that CRH also has its eye on other acquisitions, should the purchase of Lafarge and Holcim assets fall through. "This deal is an important part of the strategy of CRH, but it is not the strategy of CRH," said Manifold.
Europe: Holcim's board of directors has determined that its merger with Lafarge will be delayed due to the disagreement of terms on the deal. In a statement, Holcim said that the agenda for its upcoming annual general meeting will only focus on direct Holcim business and not the merger.
According to local media, Lafarge and Holcim are discussing a change in the planned leadership of their combined company to rescue the merger amid growing resistance to Lafarge CEO Bruno Lafont taking the top job. The companies are considering naming another Lafarge executive as CEO instead of Lafont to address demands from Holcim that would allow the deal to go ahead. Lafont could become co-chairman of the new entity, together with Holcim chairman Wolfgang Reitzle. The appointments are among various management changes being discussed.
Is the LafargeHolcim merger doomed?
18 March 2015In the UK there is an expression, coined by former Prime Minister Harold Wilson, that a 'week is a long time in politics.' While the week he was referring to has long since been forgotten, this refrain has since been repeated to the point of cliché by the mainstream media and is often used in the context of rapidly-changing political news stories. Regardless of its origin, this expression could well be used to accurately describe the current situation in France and Switzerland, where the past week has seen a number of serious and unpredictable developments in the preparation of the anticipated LafargeHolcim mega-merger.
Disgruntlement from 'those close to the deal' first surfaced as a 'wild rumour' a few weeks back but, in the past seven days, several of Holcim's shareholders, including the influential Thomas Schmidheiny, have questioned the contribution that can now be made by Lafarge. Holcim shareholders claim that the group has out-performed Lafarge in the 12 months since the deal was announced and they feel that this should be recognised financially. The abandonment of the Euro1.20 cap on the Swiss Franc by the Swiss National Bank (SNB) on 15 January 2015 has loaded the dice even further in Holcim's favour.
This is how the situation has deteriorated in the past seven days. Late last week, we had confirmation that Holcim was seeking to renegotiate the terms of the merger. On Monday we heard what at least part of those terms were, including an assertion that each Lafarge share was now worth just 0.875 of a Holcim share. Lafarge's main shareholders, accepting that their position was compromised to an extent, suggested that each Lafarge share was worth 0.93 of a Holcim share. Since then, it has become apparent that Bruno Lafont, the proposed leader of LafargeHolcim, has also put Holcim in a spin, as he is perceived to have presided over Lafarge's poorer performance.
Then, just yesterday, it was announced that the two current group boards had met separately in an attempt to arrive at new conditions with which to re-start negotiations. Commentators think that Holcim is holding all of the Aces but Lafarge has made it clear that it cannot accept a lower valuation and a CEO from Holcim. Discussions that take place 'in the dark' like this will do little to build confidence between the merging parties and infers that communication has become strained. There are twinges of antagonism in the releases that are not going to be solved by the boards sitting in separate rooms and whipping themselves into a frenzy.
Also caught up in this, like the child of a divorcing couple, is CRH. It only announced its purchase of Holcim and Lafarge divestments in February 2015. It stands to gain a joint Euro158m from Lafarge and Holcim if they fail to merge, but this will not make up for the loss of the many high-quality cement assets it otherwise stands to gain.
What will happen in the coming weeks? You have to be brave to predict how this will turn out, but our LinkedIn Group is a great place to discuss this rapidly-changing story. One thing we can be sure of is that there will be a lot to write about in another seven days. After all, a week is a long time in the cement industry!
Europe: The boards of Lafarge and Holcim met separately on 17 March 2015 to try and salvage their merger.
According to Reuters, one source said ahead of the Lafarge board meeting that Lafarge would not accept renegotiations on the governance of LafargeHolcim. The original merger agreement designated a board made up of seven members from each company and Lafarge boss Bruno Lafont as CEO. "The board cannot give satisfaction to Holcim on all points," the source said. "It cannot accept both a change of parity and a taking of control."
On 15 March 2015, Holcim said that it wanted to open talks on the exchange ratio and on 'governance issues' because the original merger terms were no longer acceptable to its board. Lafarge said on 16 March 2015 that it would consider revising the share exchange ratio, but nothing else. According to another source, Holcim has proposed changing the previously-agreed 1:1 exchange ratio to 0.875 Holcim shares for each Lafarge share, but Lafarge wants a 0.93:1 ratio.
One Holcim shareholder who opposes the deal reportedly said that the appointment of Lafarge's Lafont as head of LafargeHolcim has become a bone of contention, with some questioning his ability to deliver promised cost savings of Euro1.4bn/yr.
Ireland's CRH, which planned to buy a large portion of Lafarge and Holcim's assets to appease competition authorities, could experience collateral damage if the merger is cancelled. According to Reuters, if the merger fails, CRH is still liable for a break-up fee of Euro158m.
Europe: A conflict between Lafarge and Holcim has deepened as both groups have acknowledged that the terms of their proposed 'merger of equals' may have to be revised to reflect diverging valuations, according to Reuters.
The merger 'Can no longer be pursued in its present form,' said Holcim said in a statement on 16 March 2015. It has proposed a renegotiation of the share exchange ratio and 'governance issues.' Lafarge is willing to consider revising the share-exchange ratio in the merger, but not other aspects of the deal, it said in a separate statement.
The deal announced in April 2014 was intended to combine Lafarge and Holcim on an equal basis, but diverging results, share prices and fluctuations in the Euro and Swiss Franc have led Holcim to seek a revision of the terms. Holcim has proposed changing a proposed 1-1 share exchange ratio to 0.875 Holcim shares for each Lafarge share, according to news reports. Lafarge is said to be planning a counter proposal that would trim its weighting to 0.93 to complete the deal.
Cement market to grow between 3% and 5% in 2015
13 March 2015Mexico: Mexico's cement market could grow by 3 - 5% in 2015, driven by dynamism in the housing sector, an increase in the amount of cash remittances migrants send home and the government's national infrastructure programme, according to Holcim. Growth could, however, be limited by low crude oil revenues, federal government budget cuts and the US Dollar exchange rate volatility. Nevertheless, 2015 is likely to be much better than 2014 as far as cement sales are concerned.
The local construction industry continued to recover in the first two months of 2015 as it did after the second half of 2014. Cement sales for infrastructure projects might be driven by growth in three sectors, namely road, airport and port construction, energy construction and water pipeline and dam construction. Infrastructure projects account for 30 - 40% of cement consumption in Mexico. Housing construction accounts for 40% of all sales. An increase in the arrival of cash remittances is expected to trigger more sales of cement for housing projects. Commercial and industrial construction projects consume 20% of all sales and this segment has performed very well in recent months.