Displaying items by tag: Merger

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.

Europe: Holcim and Lafarge are in talks to renegotiate the terms of their Euro41bn merger after a divergence in the value of the two companies over the past year. The two sides are holding discussions that might result in changes to the terms of the one-for-one share deal announced last April 2015, according to The Financial Times.

It in unclear how the renegotiation might affect CRH, which agreed in February 2015 to pay Euro6.5bn for assets being sold by the two companies as they sought to address potential competition concerns over the deal.

In recent weeks Holcim shareholders have raised concerns over the terms of the deal, most vocally a representative for the Schmidheiny family, which is Holcim's largest investor. Thomas Schmidheiny, head of the family and a former Holcim chairman, wanted the terms of the deal renegotiated. Holcim's second largest shareholder, Eurocement, which is owned by Russian Filaret Galchev and holds 10% of the shares, has not publicly supported the deal.

South Africa: The board of PPC are considering an indicative non-binding proposal from AfriSam Group for a merger between the two cement producing companies. PPC will make a further announcement once its board had concluded the consideration process, according to Pretoria News. The Public Investment Corporation, the managers of the Government Employees Pension Fund, holds a 12.6% share of PPC and a 66% share of AfriSam.

Europe: Holcim's largest stakeholder, Thomas Schmidheiny, wants a better deal for the Holcim's shareholders in its planned merger with Lafarge, according to Swiss Newspaper SonntagsZeitung, which cited people close to Schmidheiny.

The merger with France's Lafarge to create the world's biggest cement company was agreed on 7 April 2015, but analysts have since flagged a potential divergence between the two companies' earnings prospects, raising the possibility of a renegotiation of terms.

SonntagsZeitung said that Holcim board member Schmidheiny, who owns 20.1% of the company according to Thomson Reuters data, sees two possible solutions. One is to weigh the exchange ratio of shares in favour of Holcim investors. Another is a special dividend. The paper also quoted another board member as saying the deal will not work in its current form, which includes each Lafarge share being swapped for one Holcim share.

SonntagsZeitung has also reported that Swiss shareholder group Ethos, which represents around 200 pension funds, is against the deal as it stands and will tell Holcim's board that it will advise members to vote against the merger unless there is a change to the exchange ratio.

Europe: Holcim is considering offering its shareholders a sweetener to win their approval for a planned merger with Lafarge, according to Swiss newspaper Sonntagszeitung.

Sonntagszeitung said that Holcim was looking at several 'creative methods' to sway its shareholders into backing the deal, including a generous special dividend or a share buyback, instead of trying to alter the terms of the deal, which involves a one-to-one share swap. However, Holcim's chief executive Bernard Fontana said that the merger agreement did not contain any mechanisms by which the terms could be automatically adjusted. Sonntagszeitung said that Holcim was considering the sweetener in response to opposition from its shareholders to the deal, which hinges on investor approval for a capital increase for financing.

India: The Competition Commission of India (CCI) has requested that LafargeHolcim divest some of its units, including limestone reserves, to prevent a monopoly in eastern India.

When Lafarge and Holcim initially announced their intention to merge operations in April 2014, they proposed a series of asset divestments in countries where they had a significant market share, but India was not among them.

After prima facie investigations by the CCI revealed that the combination would likely have an appreciable adverse effect on competition, especially in eastern India, the CCI launched, what it calls, Phase II investigations. It put the merger proposal in public scrutiny under Section 29(3) of the Competition Act, 2002 and invited comments from stakeholders including competitors. The CCI has now stated that the merger proposal is fine, but certain assets must be divested in eastern India.

According to local media, the assets can be sold to a company that is not a competitor. LafargeHolcim has 30 days to respond to the CCI's suggestions.

India: Ambuja Cement, ACC and Lafarge India may merge as part of the proposed global merger of Lafarge and Holcim, according to local media. The plan is still at an early stage and LafargeHolcim have mandated investment bank Lazard to advise on the restructuring of their Indian operations. The most likely option is the merger of ACC, Ambuja and Lafarge India into one listed entity to create the largest cement company in India. The combined cement production capacity of the three subsidiaries would be some 70Mt/yr.

As part of the new restructuring proposal, LafargeHolcim may reassess Holcim's restructuring of ACC and Ambuja, which was announced in 2014 and is currently incomplete. As part of the plan, shareholders of Ambuja had approved ACC's stake acquisition from Holcim.

Mexico: The National Competition Commission (Cofece) in Mexico has approved the merger between Holcim and Lafarge, as it does not see any risk to free competition in the country. Lafarge operates in Mexico via ELC Tenedora de Cementos, which it sold to Elementia on 16 December 2014.

India: The Competition Commission of India (CCI) will soon decide on the proposed merger of Lafarge and Holcim, according to CCI chairman Ashok Chawla on 19 January 2015. "The final order on the case should be out within a month," said Chawla.

The CCI is examining the merger as it raises competition concerns. In a joint filing to CCI, Lafarge and Holcim had said that they would continue to face aggressive competition from Indian cement makers such as UltraTech, Shree Cement and Jaypee at a pan-India level.

The total installed capacity of cement in India is about 350 Mt. Domestic consumption, which stood at 242Mt in 2011 - 2012, was expected to increase to 265Mt in 2012 - 2013.

Europe: The European Commission (EC), the European Union's antitrust authority, has approved the proposed merger of Lafarge and Holcim, subject to asset sales by both companies in regions where their activities overlap. The EC's approval is conditional upon the divestment of Lafarge's businesses in Germany, Romania and the UK. Holcim is required to divest its operations in France, Hungary, Slovakia, Spain and the Czech Republic. The proposed transaction concerns assets worth several billion Euros and will create the world's largest cement producer with operations in 90 countries.

"The Commission had concerns that the transaction, as originally notified, would have had a detrimental effect on competition in a significant number of markets in the European Economic Area (EEA)," said the EC. "The commitments offered by the two companies address these concerns."

According to the EC, its assessment found that the merged entity would have faced insufficient competitive pressure from remaining players in many markets. This would have brought a risk of price rises. In order to prevent a negative impact on competition, the companies have committed to divesting most of the operations where their activities overlap. Further, the EC said that Holcim and Lafarge will not be allowed to close the deal until it has approved the buyers of the assets put up for sale.

In April 2014, Holcim and Lafarge announced their plan to combine through an all share merger of equals to create LafargeHolcim, with nearly Euro32bn in sales. The proposed combination would be structured as a public exchange offer initiated by Holcim for all outstanding shares of Lafarge on the basis of a 1 for 1 exchange ratio. The companies also agreed to have equal dividends on a per share basis between announcement and completion. The offer would be subject to Holcim holding at least 2/3rd of the share capital and voting rights of Lafarge.