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Holcim and Lafarge in talks to save merger

Article By: ,  Financial Analyst
March 18, 2015 3:26 PM

Cement makers Holcim and Lafarge are said to be discussing a new chief executive officer appointment to the combined group in a bid to save their troubled merger.

Current Lafarge boss Bruno Lafont – who was due to become the head of the merged organisation – would be transferred to a different role, sources quoted by Reuters said today (March 18th).

Swiss firm Holcim has allegedly grown dissatisfied with his leadership and threatened to walk away if the issue is not resolved.

The sources said Bruno Lafont could be named co-chairman of the future company, alongside Wolfgang Reitzle, the current chairman of Holcim.

Talks stalled last week

Reuters reports that Bruno Lafont's "brash style" and "tendency to brook no dissent among his management or with investors" has proven difficult for the Swiss side to accept.

The decision to try to find a new role for Lafont within the combined group came about yesterday after the two largest shareholders of Lafarge pushed for the French group to open discussions to save the deal, a source said.

Holcim and Lafarge have been in discussions to create the world's largest cement maker, but the former has put the brakes on the deal last week. Holcim said that the deal could not exist "in its present form" despite the two sides agreeing to the merger in April. The original merger gave Lafarge shareholders one Holcim share for each Lafarge share.

However, since then Holcim's shares have outperformed that of its French counterpart, which prompted Holcim to call off the current merger deals, that would create a company with a combined value of €32 billion (£22.8 billion).

Lafarge said that it was committed to the long-term value of the deal and said it would be looking into the "possibility of a revision of the party, in line with recent market conditions".

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