Holcim called a halt yesterday to its merger with Lafarge, pressing the French company to renegotiate the deal terms and putting their plan to create the world’s biggest cement maker at risk.
The deal announced in April 2014 was supposed to combine the firms on an equal basis. But since then, diverging results, share prices and a surge in the Swiss franc against the euro have strengthened Holcim’s position and led its largest shareholder to press publicly for a revision of the agreement.
“The Holcim board of directors has concluded that the combination agreement can no longer be pursued in its present form,” Holcim said in a statement, saying it was ready to talk about both the share exchange ratio and “governance issues”.
Lafarge said in a separate statement it was willing to consider revising the share exchange ratio but not other aspects of the deal, which was unveiled as “a merger of equals”.
Lafarge boss Bruno Lafont was due to become chief executive of the merged company but Holcim wants to change the earlier plan, a source said.
A shareholder said the board composition was also an issue, since the original plan to divide the seats equally with seven for each side was no longer fair.