Italcementi, Ciment Francais abandon merger

MILAN, June 27 (Reuters) - Italy's Italcementi SpA (ITAI.MI) and its French unit Ciments Francais (CMFP.PA) have abandoned a proposed merger, saying on Saturday that conditions set had not been met.

On June 19, Italcementi and Ciments Francais said they had suspended a final decision on their merger in the face of discussions with U.S. holders of notes issued by Ciments Francais in 2002 and 2006 to the overall tune of $500 million.

They said the companies and the noteholders disagreed on contractual clauses regarding whether a merger could go ahead without the prior consent of the noteholders.

"The requests presented by the group of U.S. institutional investors ... were indeed deemed excessive and unacceptable by the two companies, and not consistent with the purpose of the merger," the companies said in a joint statement after board meetings on Friday.

"Accordingly, the proposed merger was abandoned."

Italcementi, the world's fifth-largest cement maker by production capacity, said in February it would buy out the 18 percent of Ciments Francais it does not already own.

"Among the large international groups, Italcementi and Ciments Francais have the highest debt rating in the cement sector, evidence of a strong financial and economic position," Italcementi CEO Carlo Pesenti said in another statement.

"It therefore appeared unacceptable and unjustified to meet requests that were not in line with our rating and solidity."

He said the merger had not envisaged significant immediate economic benefits, but aimed to create "a more agile and effective organisational structure".

"This remains the goal that we will pursue by means of various alternative projects and programmes to create further efficiencies in the management and operational structure," he said. (Editing by Sue Thomas)