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News Merger

Displaying items by tag: Merger

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Grandville cement plant to get new ownership after FTC action in LafargeHolcim merger

09 June 2015

US: According to local media MiBiz, the planned merger of Lafarge and Holcim will result in a new owner for a Holcim-owned cement plant in Grandville and could lead to more competitive cement pricing in the West Michigan market.

In response to an antitrust complaint filed by the Federal Trade Commission (FTC) that the LafargeHolcim merger 'would likely substantially lessen competition,' in 12 US markets, including in Grand Rapids, the parties have agreed to divest 24 facilities in North America. Among the sites is a Holcim (US) -owned cement plant in Grandville, which the company plans to sell to Buzzi Unicem USA. The acquisition of the Grandville plant should be completed in July 2015, according to Patrick Lydon, vice president and general counsel at Buzzi Unicem. Lydon said that the Grandville plant would be the company's first venture into the Michigan market. He does not expect any significant changes to operations.

The FTC weighed in on the proposed merger to create LafargeHolcim, the world's largest cement company with a projected US$35bn in annual revenues, because it said that the acquisition would further concentrate the industry in 12 'already highly-concentrated' markets. In the affected markets, Holcim and Lafarge are either the only two suppliers of Portland cement or slag cement or are 'at most' two of just four suppliers.

"If the merger between Holcim and Lafarge went through as originally planned, it would have likely had a short-term impact, but even more of an impact on long-term competitive pricing," said Greg Kerkstra, president and CEO of Grandville-based Kerkstra Precast Inc. "Now that the FTC has determined a divestiture of some of these assets in particular markets, that could actually encourage even more competition than before the merger, in our eyes."

Other affected markets in Michigan include Detroit and northern Michigan. Holcim is selling a cement terminal in Elmira, Michigan to Buzzi Unicem and it is seeking buyers for terminals in Detroit and Dundee.

Published in Global Cement News
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Afrisam investor Pembani Group merges with Shanduka

02 June 2015

South Africa: Private equity company Pembani Group, investor in Afrisam and Shanduka, a South African investment group, have passed regulatory filings to the Mineral Resources Department and the competition authorities to combine their interests. Pembani acquired the interests of Shanduka following the departure of deputy president Cyril Ramaphosa, who sold his Shanduka stake after rejoining the government in 2014. The deal will also transform Standard Bank's and Ramaphosa's family trust Jadeite's Shanduka stakes into minority ownership in Pembani.

On 1 June 2015 Pembani, which has a US$730m portfolio after the merger, said that the cement industry has a duty to respond to disruptions caused by the entrance of new players, cheap imports and expanded capacity. "Businesses have a duty to respond to changes," said Pembani CEO Kennedy Bungane. He said that the group would pursue opportunities in the rest of sub-Saharan Africa.

The first substantial move by Pembani is likely to be in the cement industry. Although only a 30.5% investor in Afrisam, Pembani controls it through an agreement with the PIC, which is a 66% shareholder. The PIC is also PPC's single largest investor with a 12% stake. Pembani chairman Phuthuma Nhleko is also Afrisam's chairman. Afrisam wrote to PPC, South Africa's largest cement maker, in December 2014, offering a combination of the entities. After considering the proposal, but without presenting it to a shareholder vote, the PPC board rejected the overture in March 2015, saying that it did not believe there would be enough synergies to justify a merger.

Bungane said that the cement industry had undergone permanent changes. "The cement industry in South Africa has changed radically and permanently," he said. "I do not rule out a response by the market to these disruptions." Though Bungane would not elaborate on Pembani's plans for Afrisam, he said it was important for businesses to respond to changing conditions.

Pembani also owns 63% of Tanzania's Tanga Cement, which Bungane said would be used to enter the rest of east Africa, where a shortage of cement capacity makes for good profit margins.

Published in Global Cement News
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LafargeHolcim merger reaches final stage

02 June 2015

Europe: Following the clearance from the Autorité des Marchés Financiers (AMF) on 28 May 2015, Holcim launched the public exchange offer for all Lafarge shares at an exchange ratio of 9 Holcim shares for 10 Lafarge shares on 1 June 2015. Through acceptance of the public exchange offer, Lafarge shareholders will pave the way for the creation of LafargeHolcim.

The public exchange offer will be open for 25 trading days until 3 July 2015. With this public exchange offer, Lafarge and Holcim are implementing the final step of their project to merge the two companies. The merger is expected to close in July 2015.

Published in Global Cement News
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How many staff will LafargeHolcim need?

27 May 2015

There was a lot of news out of Lafarge and Holcim this week regarding preparations towards their merger. Just this morning we heard that the partners have entered into a binding agreement with Ireland's CRH regarding the sale of the assets that must be divested. Meanwhile, Lafarge and Holcim have also completed the appointments for the future LafargeHolcim executive committee. Its nine members will be responsible for such tasks as finance, integration, performance and costs, growth and innovation, as well as regional activities in Europe, Asia Pacific, the Middle East and Africa, North America and Latin America.

However, it was other types of personnel that featured in Lafarge and Holcim's earlier press releases. On 19 May 2015 Lafarge came out and announced the first (pre-merger) job losses that will result from the merger. It will cut 380 positions in central and regional corporate roles, with 166 going in its native France. For its part Holcim will make 120 pre-merger job losses, all in Switzerland. Ignoring the clear discrepancy in scale between the different sides, Lafarge and Holcim will have lost at least 500 jobs out of their combined ~130,000. This is just a scratch on the surface, but it does raise an interesting question: How many more jobs will go at LafargeHolcim?

First up are the staff that will go to work for CRH. This probably represents the largest number of staff that will come of LafargeHolcim's books relative to Lafarge and Holcim's current staff levels. According to their 2014 Annual Reports, Lafarge and Holcim employ a combined 81,000 staff in cement roles. Given that they have a combined 425Mt/yr of cement capacity (give or take) this equates to around 190 staff for each 1Mt/yr of capacity.

As the new LafargeHolcim will have control over around 340Mt/yr of cement capacity, we can crudely scale the 190 staff up to 64,600 cement sector staff. This indicates that around 16,400 staff that are currently employed by Lafarge and Holcim will be 'off' to CRH (and others). This leaves 48,100 staff in non-cement roles at LafargeHolcim.

Will more jobs be lost post-merger? Lafarge and Holcim have stated that the new entity will have 115,000 staff. However, with around 42% of future employees employed in non-cement roles - compared to 41% and 34% for Lafarge and Holcim respectively in 2014 - it certainly seems that there could be scope for at least some reduction in overall numbers from LafargeHolcim's non-cement functions. Future job losses could therefore be a possibility, but the exact scale of future consolidations and 'synergies' (if any) will only become apparent post-merger. Maybe LafargeHolcim could end up with around 105,000 to 110,000 staff.

A key time may well be early 2016, when LafargeHolcim will launch a new 'corporate structure.' This term was also used by Lafarge and Holcim in their most recent releases, so further job losses could be on the cards.

One member of LafargeHolcim staff with nothing to worry about now will be Bruno Lafont, current CEO of Lafarge. He received a Euro2.5m bonus this week for his 'key role' in conducting the merger. How LafargeHolcim staff who could be nervous about their jobs will take this remains to be seen.

The Lafarge-Holcim Report from Global Cement is available to order now

Published in Analysis
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Lafarge chief executive gets Euro2.5m merger bonus

21 May 2015

France: Lafarge chief executive Bruno Lafont has been awarded a Euro2.5m bonus for the successful merger with Holcim. The board of directors of the company awarded Lafont the money 'for his key role in the merger project with Holcim' and 'his exceptional performance,' according to a document posted on its website. The board accorded the bonus at a meeting on 12 May 2015, two days after Holcim shareholders approved the merger by a vote of 94%. Lafont will receive the money in May 2015.

Published in Global Cement News
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Holcim launches reorganisation of group functions, cuts 120 jobs

20 May 2015

Switzerland: Holcim is preparing the reorganisation of group functions in the context of the proposed merger with Lafarge. The objective is to create a lean organisation with empowered countries, regional management platforms and group functions for the combined company.

Group functions are designed to increase the competitiveness of the group at global, regional and local levels, to implement best practices and to support and enable LafargeHolcim to achieve the highest possible performance. The proposed new organisation would result in a net reduction of approximately 120 positions in Holcim group functions in Switzerland.

The social consultation process to reduce the impact on roles that are affected by reductions will now be launched with the employee representatives in Switzerland. In parallel, Lafarge is presenting to its social bodies' representatives the proposed organisation of central functions in the context of the creation of LafargeHolcim.

The merger project is expected to close in July 2015, subject to the acceptance of Holcim's public exchange offer by the shareholders of Lafarge. The implementation of the new organisation is expected for early 2016 after completion of all relevant social consultations in Switzerland and France.

Published in Global Cement News
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Lafarge to cut 380 jobs ahead of merger with Holcim

19 May 2015

France: Lafarge has proposed to cut 380 jobs as part of its pre-merger preparations ahead of its merger with Holcim to form LafaregHolcim. The new group, set to be the world's largest building materials group, will employ approximately 115,000 people.

The organisation of the new group will be balanced between a decentralised structure and strong central functions based on three organizational levels: Countries; Regions (Europe, North America, Middle East & Africa, Latin America, Asia-Pacific, and; Corporate functions, which will help define the Group's key strategies.

There will be an equivalent number of personnel in the central functions in France and Switzerland. The new group's research and development centre will be located in France.

Concerning Lafarge at worldwide level (i.e., in sites located in Atlanta (USA), Beijing (China), Cairo (Egypt), Kuala Lumpur (Malaysia), Lyon (France), Montreal (Canada), Paris (France) and Vienna (Austria)), the proposed new organisation of central functions will result in approximately 380 net job losses, with 166 of these in Paris and Lyon.

The social support measures that will be negotiated with employee representatives will mostly consist of solutions based on internal mobility, early retirement and (in France) voluntary departures. The proposed merger will not affect employment in Lafarge's operational functions in France, which employ more than 4500 people.

This procedure is a key phase in the preparation of the creation of the new LafargeHolcim Group. The completion of the proposed merger is expected to occur in July 2015. Before this can happen, the public exchange offer will have to be successful, with shareholders tendering at least two-thirds of Lafarge shares.

Published in Global Cement News
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Holcim shareholders approve all motions at Extraordinary General Meeting

08 May 2015

Europe: On 8 May 2015, Lafarge and Holcim secured support from Holcim shareholders for their proposed merger. Representing around 72% of Holcim's share capital, the 738 shareholders attending the Extraordinary General Meeting of Holcim Ltd approved all motions proposed by the board of directors.

"Holcim shareholders have voted for a joint future with Lafarge with an overwhelming majority. With this decision, we create the opportunity for profitable and sustainable growth. Holcim and Lafarge can now take the final steps to found the world leader in the building materials sector," said Wolfgang Reitzle, currently chairman of Holcim and future co-chairman (statutory chairman).

"It is a great satisfaction that Holcim shareholders overwhelmingly gave their support to the proposed merger. This endorsement is a clear demonstration that shareholders are fully convinced of the substantial value creation potential. I am confident that Lafarge shareholders will in turn ratify this once-in-a-lifetime opportunity and tender their shares, paving the way to the merger. The combined group will be a unique global champion in the building materials industry, focusing on customers and innovation, uniting the best teams in the industry. Featuring a new business model, outstanding cash flow generation capabilities and reduced capital intensity LafargeHolcim is designed to deliver superior returns to shareholders," said Bruno Lafont, currently chairman and CEO of Lafarge and future co-chairman of LafargeHolcim.

Holcim shareholders approved with a vast majority the creation of both ordinary and authorised share capital, which are necessary for the successful completion of the merger. In addition, shareholders also voted for the creation of authorised share capital in order to allow the distribution of a stock dividend to all shareholders of the new Company. The proposal to change the corporate name of Holcim Ltd to LafargeHolcim Ltd was approved as well.

The shareholders elected Bruno Lafont, Bertrand Collomb, Philippe Dauman, Paul Desmarais Jr, Oscar Fanjul, Gérard Lamarche and Nassef Sawiris to the board of directors. They will join Wolfgang Reitzle, Beat Hess, Alexander Gut, Adrian Loader, Thomas Schmidheiny, Hanne Birgitte Breinbjerg Sørensen, and Dieter Spälti, who had been elected at Holcim's ordinary General Meeting on 13 April 2015. Subject to the effective completion of the exchange offer, Anne Wade and Jürg Oleas will resign from their office as current members of the board of directors of Holcim.

Published in Global Cement News
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UltraTech plans to take over Century Cement

08 May 2015

India: Aditya Birla Group´s UltraTech Cement plans to merge the cement division of BK Birla-owned Century Textiles and Industries, Century Cement, in a share-swap proposal with a deal value of US$1.64bn. The transaction, if approved by the boards of both companies, would help UltraTech add 13Mt/yr to its existing capacity of 65Mt/yr, taking it to the total of 78Mt/yr.

Published in Global Cement News
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Star Ferro and Cement de-merger approved by court

08 May 2015

India: The Meghalaya High Court has approved the de-merger plans between Star Ferro and Cement Ltd (SFCL), Shyam Century Ferrous Ltd and their respective shareholders. The company's board had approved a de-merger scheme in 2014 under which a new company, Shyam Century Ferrous Ltd, was formed to separate the company's ferro alloy division as part of an overall business reorganisation plan.

Published in Global Cement News
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