Holcim, Lafarge create global concrete giant

FE Team | Published: April 08, 2014 00:00:00 | Updated: November 30, 2026 06:01:00

GENEVA, April 07 (AFP) - Swiss cement group Holcim and French rival Lafarge are merging to create the biggest global concrete group worth 40.0 billion euros, with an eye to booming construction in emerging markets, they said on Monday.
The deal, a major event in the global construction industry described in a joint statement as "a merger of equals", will be based on the offer of one Holcim share for one Lafarge share.
The two groups together have a stock market value of 40 billion euros ($55 billion), Holcim chairman Rolf Soiron told a press conference.
The companies made a commitment to sell assets to pre-empt anti-trust objections from competition authorities.
Soiron said these disposals would account for annual sales of 5.0 billion euros, two thirds of which would occur in Europe.
Lafarge assured that the deal would not lead directly to plant closures.
On the Swiss stock market, the price of Holcim shares jumped 3.37 percent to 82.90 Swiss francs in morning trading. In Paris, Lafarge shares were up 3.06 percent to 66.05 euros. Their stocks had already risen sharply on Friday to rumours of merger talks.
The new company will be called LafargeHolcim and "will have a unique position in 90 countries and will be evenly balanced between developing countries and countries with strong growth," the firms said in a join statement.
They highlighted the match of their activities since Lafarge has a strong presence in Africa and Holcim in Latin America.
However they both have big and competing interests in Europe.
In Zurich, stock analyst Ute Haibach at brokers J. Safra Sarasin said the deal should result in "more balanced exposure in emerging markets."
At stock brokers Aurel BGC in Paris, analysts said that the merger would be "long and complex but was technically possible".
Figures in the statement show that the new giant will employ 136,000 people across the countries where it operates, have annual sales of 32 billion euros and underlying profits of 6.5 billion euros.
The deal would generate economies of scale of 1.4 billion euros over three years.
LafargeHolcim will be in a powerful position as a supplier of cement for concrete, a key material in the construction of buildings and infrastructure. It is a sector in which new technologies are being used increasingly in materials, including cement.
Building supply companies have been expanding in emerging countries where they see huge opportunities for growth from the construction of buildings and infrastructure.