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Two cement giants build future together

Sunday, Apr 06, 2014 - 01:34

April 7 - Switzerland's Holcim unveils an all-share deal to buy France's Lafarge to create the world's biggest cement maker with combined sales of 32 billion euros. But as Ciara Sutton reports both firms must sell businesses in order to satisfy anti-trust concerns.

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Laying the foundations of a deal that would make the world's biggest cement maker - Switzerland's Holcim is to join forces with France's Lafarge. Together they will have combined sales of 32 billion euros and a presence in 90 countries. The merger will be worth 60 billion dollars, with Holcim having 53 percent shareholder control. The industry's biggest-ever tie-up will help save 1.4 billion euros over the next 3 years. Both firms have been battling the affects of high energy prices in recent years. But there could be cracks in their plan. Chris Hughes is from Reuters Breakingviews. (SOUNDBITE) (English) REUTERS BREAKINGVIEWS EDITOR, CHRIS HUGHES, SAYING: "We don't actually know if this deal is going to complete. There are some big antitrust hurdles, and to get over them they can be surmounted, but to do that they're going to have to sell a whole load of assets." A plan to sell off 10 -15% of their businesses has already been proposed. But there will still be antitrust scrutiny in key markets South America, North America, Africa and Europe. BGC Market Commentator Mike Ingram (SOUNDBITE) (English) BGC MARKET STRATEGIST, MIKE INGRAM, SAYING: "It looks to me like a defensive merger. There rationale is largely to strip out costs particularly in Europe where there is the majority of overlap of their asset base, and also where the growth prospects are poorest." But the two companies say they complement each other well, with Lafarge stronger in Africa and Holcim stronger in Latin America. Shares in Lafarge rose 4 percent on the news and Holcim's were up over 5 percent.

Two cement giants build future together

Sunday, Apr 06, 2014 - 01:34

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