CRH had agreed to buy Lafarge Tarmac, which employs 6,600 staff at 330 sites and produces 45 million tonnes of aggregates and seven million tonnes of asphalt a year, in a deal designed to help clear the regulatory path allowing the 42 billion euro (£30bn) merger of France’s Lafarge and Switzerland’s Holcim to create the world’s largest cement group.
But earlier this month Lafarge and Holcim said they could not pursue the merger, agreed last April, which would have seen Lafarge shareholders receive one Holcim share for each Lafarge share. Since the original agreement Holcim’s shares have outperformed Lafarge’s stock.
However, the new deal will see investors exchange nine Holcim shares for 10 Lafarge shares.
Holcim chairman Wolfgang Reitzle 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.”
The new agreement by Lafarge and Holcim once again opens the door to CRH’s purchase of Lafarge Tarmac, which also includes operations in Europe, North America and emerging markets.
The rationale for selling the unit to CRH disappears unless the mega merger is completed.