Lafarge Holcim merger back on track

Companies agree to new share exchange ratio and appointment of new CEO of the combined business

FOLLOWING Holcim’s recent rejection of the terms of the original merger deal, the boards of directors of Holcim and Lafarge announced this morning that they have reached an agreement on revised terms for the merger of equals between both companies.

Both parties have agreed on a new exchange ratio of nine Holcim shares for 10 Lafarge shares.

In addition, a new chief executive officer for the combined group, to be proposed by the Lafarge board and accepted by the Holcim board, will be appointed as from the closing of the transaction. This appointment will be communicated in due course, at the latest upon filing of the public offer to Lafarge’s shareholders.

Holcim’s Wolfgang Reitzle and Lafarge’s Bruno Lafont will be non-executive co-chairmen of the board, and Holcim’s deputy chairman, Beat Hess, will be vice-chairman of the board.

The Holcim shareholder resolutions required to implement the combination are expected to be presented to a Holcim shareholders meeting on or around 7 May 2015.

Both companies have agreed that, subject to shareholder approval, the new company will announce a post-closing scrip dividend of one new LafargeHolcim share for each 20 existing shares.

Wolfgang Reitzle, chairman of Holcim, said: ‘I am very pleased that we are now able to proceed with our project to create a truly outstanding global leader in building materials. Bruno Lafont and I will work closely together to ensure that the value-creation potential of this merger will be realized for the benefits of all shareholders. I want to highlight that Bruno has made a tremendous contribution to getting us this far and that I am very confident in our ability to work together in the new board.’

Bruno Lafont, chairman and CEO of Lafarge, said: ‘We are crafting a new leader in the building materials industry focusing on customers and innovation. The new company will gather best-in-class teams of our sector with the strength of our two combined companies. It creates a new business model with outstanding cash flow generation capabilities and reduced capital intensity.’

Certain key shareholders of both companies have confirmed their support for the revised merger terms. The two parties expect the transaction to close in July 2015.