By Peter OBIORA InvestAdvocate
Lagos (INVESTADVOCATE)-Two of the world’s leading suppliers of cement, Holcim Ltd and Lafarge SA said on Friday they have reached an agreement on their planned €42 billion ($44.27 billion) merger deal.
“The Boards of Directors of Holcim and Lafarge are pleased to announce that they have reached an agreement on revised terms for the merger of equals between both companies,” a joint statement from Holcim and Lafarge said.
According to both parties, a new exchange ratio of nine (9) Holcim shares for 10 Lafarge shares as been agreed.
Under the agreement, Lafarge will produce the new chief executive officer (CEO) for the combined group. “The appointment is expected to be communicated in due course, at the latest upon filing of the public offer to the Lafarge shareholders,” the statement added.
As part of the agreement, Wolfgang Reitzle and Bruno Lafont will be non-executive co-chairmen of the board, while Beat Hess will be vice chairman.
The two co-chairmen will be working closely together to make this merger a success. Beat Hess will be Vice-Chairman of the Board.
Holcim is expected to hold shareholders meeting to present their resolutions required to implement the combination latest May 7, 2015
Both cement producers have agreed that, subject to shareholder approval, the new company will announce a post-closing scrip dividend of 1 new LafargeHolcim share for each 20 existing shares.
Wolfgang Reitzle, Chairman of Holcim 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. Bruno 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. I want to highlight that Bruno has made a tremendous contribution to getting us this far and that I am very confident in our ability to work together in the new Board”.
Bruno Lafont, Chairman and CEO of Lafarge 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. It creates a new business model with outstanding cash flow generation capabilities and reduced capital intensity”.
Feelers say certain key shareholders of both companies have confirmed their support for the revised merger terms. The deal is expected to be concluded in July 2015.
Both firms had last week Thursday could not agree on financial terms and governance structure.
