Lafarge, Holcim to merge into $50 billion company

Lafarge and Holcim are discussing a merger that would create one company whose combined annual sales are about $43 billion. The new company, which the Wall Street Journal estimates would be valued at $50 billion, would be called LafargeHolcim. The deal is expected to close in the first half of next year.

“This proposed merger is a once-in-a-lifetime opportunity to deliver substantially better value to customers with more innovation, a wider range of products and solutions and more sustainability and enhanced returns to shareholders,” says Rolf Soiron, Holcim’s current chairman, in a press release. “LafargeHolcim will be uniquely positioned to take advantage of growth in developed markets and the world’s fastest growing economies by supplying the materials that will enable the construction industry to meet the challenges of the future.”

According to The Wall Street Journal, both Lafarge and Holcim anticipate selling as much as $1.3 billion in assets as part of the deal. Company executives, on a conference call, would not specify which of the companies’ assets would be made available. Executives did, however, indicate sales would be concentrated in Europe, with about two-thirds of divestments being European assets.

Based on reports, Lafarge and Holcim have given no indication as of yet on potential sales of North American assets.

Under the merger, the companies say Wolfgang Reitzle would serve as LafargeHolcim chairman. Bruno Lafont would be CEO and a member of the board.

“The merger of Lafarge and Holcim will allow the group with strong roots in Europe to enter into a new dimension in our ambition to contribute to building better cities on a global scale and in a sustainable manner,” says Lafont, current chairman and CEO of Lafarge, in a press release.

Photo courtesy of Lafarge photo library/Ignus Gerber