Holcim and Lafarge agree revised merger terms

The boards of directors of Holcim and Lafarge have announced a new exchange ratio of nine Holcim shares for every 10 of Lafarge’s to take account of the appreciation of the Swiss franc since the deal was signed last year. 

The announcement comes after the cement giants revealed this week that their merger would not go ahead "in its present form" owing to disputes over who would lead the combined group and the rate at which shares will be exchanged.

A new chief executive for the combined group will be agreed after the transaction has closed. They will be proposed by the Lafarge board and will have to be approved by Holcim’s executives.  

Bruno Lafont, the chief executive of Lafarge, was previously tipped to lead the merged company.  

Lafont and Wolfgang Reitzle, the chairman of Holcim, will be non-executive co-chairs of the board. Beat Hess, vice chairman of Holcim will be vice chairman of the board.  

A new deal will be presented to Holcim shareholders at a meeting on or about 7 May.  

Lafont 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." 

Reitzle 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. Lafont and I will work closely together to ensure that the value creation potential of this merger will be realised for the benefits of all shareholders." 

If the merger goes ahead the combined company would have annual sales of $33.8bn. The transaction is expected to close in July this year.