The world’s two largest cement makers, France’s Lafarge SA and Switzerland’s Holcim Ltd, on Saturday agreed on the terms of a merger that would create a company with a stock market value of about US$55 billion, French newspaper Le Figaro said online.
Company representatives were not immediately available for comment. The story did not identify sources.
The firms had issued dual statements on Friday saying they were in advanced merger talks, eyeing a deal to help slash costs, trim debt and better cope with the soaring energy prices and weaker demand that have hurt the sector since the 2008 global economic crisis.
Photo: Bloomberg
The deal would see Holcim launch a public takeover offer for Lafarge, payable entirely in shares, Le Figaro said.
If successful, the combined entity would be based in Switzerland, but have operational headquarters in both Switzerland and France.
Lafarge chief executive Bruno Lafont would become CEO of the combined entity, while the chairman will be Swiss, according to the report.
Any deal is likely to draw scrutiny from European regulators, who would probably require the companies to shed cement plants and distribution facilities before approving any merger.
Industry observers said that the rankings of the firms’ sizes vary according to methodology.
According to a ranking last year by specialized trade magazine Global Cement, which assesses overall output capacity based on a broad range of factors, China’s Anhui Conch Cement Co (安徽海螺水泥) had an annual output capacity of 217 million tonnes, followed by Lafarge with 205 million tonnes and Holcim with 174 million tonnes.
Founded in Switzerland in 1912, Holcim employs 71,000 people, with production sites in about 70 countries and a market presence on every continent. It notched up net sales of 19.7 billion Swiss francs (US$22.2 billion) last year.
Lafarge began as a French limestone-quarrying company in 1833 and now employs 65,000 people in 64 countries, with sales of 15.8 billion euros (US$21.65 billion).
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