A merger of equals to create LafargeHolcim

 Holcim and Lafarge announced their intention to combine the two companies through a merger of equals, unanimously approved by their board of directors and fully supported by the core shareholders of both companies.
This new global company with European roots would deliver compelling benefits for all stakeholders. LafargeHolcim would be in the best position to contribute to addressing the challenges of urbanisation: affordable housing, urban sprawl and transport. The new group would increase its offer through innovation delivered on an expanded scale, best in class R&D and a combined portfolio of solutions and products. Both companies have pioneered sustainability and climate change mitigation in the industry and are committed to take it to the next level.
LafargeHolcim would have an enhanced presence in the global building materials sector with a No 1 position globally across cement, concrete and aggregates and new opportunities to optimise production and commercial networks.
Lafarge and Holcim pro forma combined sales amount to €32 billion and EBITDA to €6.5 billion. After a strategic optimisation of the portfolio through a pro-active divestment process, in anticipation of regulatory requirements, LafargeHolcim would occupy complementary positions.
Combined operations would include production sites located in 90 countries across all continents with the most balanced and diversified portfolio in the industry. This will deliver highly attractive growth prospects across both high growth and developed markets. No country would account for more than c.10% of combined revenues.
LafargeHolcim expects the following annual synergies:€1.4 billion of incremental synergies on a full run-rate basis phased in over 3 years with one third in year one• €1 billion at EBITDA level through best practices, scale and crossutilization of innovative products and solutions• €200 million in financial savings• €200 million in capital expenditure optimisation.
Commenting on this announcement, Rolf Soiron, current Chairman of Holcim, said, “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”
Bruno Lafont, Chairman and CEO of Lafarge, also commented, “For years, I have had the utmost respect for Holcim. 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.”Project highlights• A merger of equals creating the most advanced group in the building materials industry• LafargeHolcim unprecedented range of products and services to answer the changing demands of the building materials industry and the challenges of increasing urbanisation• Both companies combined sales amount to €32 billion and EBITDA to €6.5 billion• Transaction structured as a public exchange offer initiated by Holcim with an exchange ratio of 1 Holcim share for 1 Lafarge share• Enhanced performance through incremental synergies totalling more than €1.4 billion on a full run-rate basis phased in over 3 years with one third in year one• Strategic optimisation of portfolio while anticipating regulatory requirements through divestments: 10-15 per cent of the global EBITDA• Combined group to be uniquely positioned in 90 countries around the world with a balanced exposure to both developed and high-growth markets• Clearly defined governance with an equally composed board (7 from Lafarge, 7 from Holcim)• Wolfgang Reitzle as Chairman• Bruno Lafont as CEO and member of the board• Unanimous approval by the two boards of directors and full support from core shareholders of both companies• Closing expected in H1 2015.
 
 
 

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