Displaying items by tag: France

On the face of it this week's 'news' that CRH expects to receive the regulatory decisions it needs on its Euro6.5bn purchase of Lafarge and Holcim's joint divestments without significant delay is not particularly ground-breaking. However, the press release helpfully suggests that the deal will proceed according to CRH's desired outcome and only needs to be rubber-stamped. This is not strictly the case, with approval required in the EU, Philippines, Brazil, Canada and Serbia.

So... this story could just be incidental 'puffery' and the timing irrelevant. However, if read in the context of the letter concerning the acquisition from CRH Chairman Nicholas Hartery to company shareholders, it makes for a far more interesting read. Issued on 20 February 2015, the letter notifies shareholders of CRH's planned Extraordinary General Meeting (EGM) on 19 March 2015 and it starts fairly innocuously. The Chairman recommends that shareholders approve CRH's resolution to proceed with the acquisition of the LafargeHolcim assets. He describes the strong overlap between the divestments and CRH's existing portfolio, as well as the financial reasons behind the move. So far, as expected.

However, later in the document, the language gets fairly heated, bordering on bizarre in places. Hartery says that CRH has given 'hell or high-water' commitments to Lafarge and Holcim regarding the purchase This language indicates the importance of the deal to the board and possibly the level of personal involvement in the process to this point.

'What has CRH done?' we are supposed to ask. Are we led to believe that CRH has, in poker parlance, gone 'all in?' Any shareholders that are in doubt as to the board's position need look no further than the section concerning 'break fees.' If CRH backs away from the deal for any reason, for example by failing to approve the resolution at the EGM, the company will have to give a combined Euro158m to Lafarge and Holcim. This would be a sizeable headache and CRH can take no chances.

Returning to CRH's press release, its timing is even more intriguing when we consider reports out of Switzerland this week. Swiss newspaper Sonntagszeitung reports that Holcim has considered offering its shareholders a 'sweetener' to win their approval for the merger. It says that this could involve 'creative methods' to sway its shareholders into backing the deal, including a generous special dividend or a share buyback. The paper reports that Holcim is wary of not securing investor approval for a capital increase for financing, which is required for it to satisfy its side of the deal.

Holcim's actions may in turn be motivated by Reuters reports from 23 February 2015, which state that analysts have seen a potential divergence in earnings outlooks between Lafarge and Holcim as a potential 'spanner in the works' of the deal. This is in response to Lafarge's apparent poor performance relative to Holcim in the fourth quarter of 2014. Reuters even refers to analysts' rumblings that the terms of the whole mega-merger may be up for renegotiation in light of this.

CRH has said that it is prepared to move hell and high water to buy the LafargeHolcim divestments, but will it be able to if there is no LafargeHolcim from which to divest?

The full letter to CRH shareholders and associated information about the proposed CRH acquisition of Lafarge and Holcim's proposed divestments can be seen here. 

CRH has made good on its intentions. This week it stumped up Euro6.5bn to buy assets from Lafarge and Holcim in four continents. The move follows preparation since at least May 2014 when the Irish building materials group announced a divestment programme. In October 2014 it announced that it would sell its brickwork division.

CRH is finding the cash through a mix of existing cash, debt and equity placing. Interestingly, back in 2012 an Irish stockbroking analyst who was interviewed reckoned that the company could spend up to Euro3.5bn on acquisitions whilst remaining within its banking agreements. Throw in the recent sales and planned divestments and the planned acquisition from LafargeHolcim doesn't seem like too much of a stretch for CRH.

If completed, the purchase will see CRH take on 24 cement plants with a production capacity of 36Mt/yr. As a back of the envelope calculation suggests the sale price of Euro6.5bn isn't far off the occasionally used price of US$200/t for western cement production. The deal also includes aggregates, ready mixed concrete and asphalt assets.

The purchase marks a change in CRH's buying strategy both in terms of scale and distribution. Much of CRH's previous acquisitions have been minority shareholdings that make it difficult to accurately report the company's position in the cement industry. For example, in our Top 100 Report CRH was reported to have a production capacity of 6.49Mt/yr for majority shareholdings with another 19.9Mt/yr for minority shareholdings. The new cement capacity being purchased blows this away because it more than doubles CRH's total capacity and it appears to be all majority owned. CRH thinks that this will propel it to become the world's third biggest building materials manufacturer after LafargeHolcim and Saint-Gobain, leapfrogging Cemex and HeidelbergCement in the process. Strangely there is no mention of the huge Chinese players in the top five manufacturers in CRH's acquisition presentation.

CRH has avoided buying plants in southern Europe but it is relying on the slowly improving growing UK market, where CRH will pick up four plants, to balance the risk. Elsewhere in Europe, the three Holcim plants in France have been suffering from continued low construction rates in that country and the two Lafarge cement plants in Romania are unlikely to have recovered from a production fall in 2013. Outside of Europe growth has been poor in Quebec in 2013 and 2014, where CRH is buying two plants from Holcim. Both Lafarge and Holcim have also seen a slowdown in Brazil. However, the Philippines does seem like a better bet for CRH, with solid cement volumes growth seen by Lafarge in 2013 and the first three quarters of 2014.

With CRH now looking like a company that wants to produce cement rather than one that owns parts of companies that produce cement, all eyes are on the construction markets. 14 of the 24 cement plants CRH are buying are in Europe. Buying at the bottom of a sustained production slump makes sense because the asking price will be low. However, has the bottom been reached yet?

France/Switzerland: Holcim and Lafarge have announced the executive committee for the proposed merged company, LafargeHolcim, due to be formed in the first half of 2015. As previously announced, Lafarge's current CEO Bruno Lafont will become LafargeHolcim's first CEO and the chairman of the new board will be Wolfgang Reitzle, currently chairman of Holcim.

Lafont will lead a project team of 10 managers from both Holcim and Lafarge to handle the transition. Once the merger is finalised, the members of this project team will be officially appointed members of the Executive Committee.

The future executive committee is composed of:

• Finance: Thomas Aebischer, currently in charge of Finance at Holcim;
• Integration, Organisation and Human Resources: Jean-Jacques Gauthier, currently in charge of Finance at Lafarge;
• Europe: Roland Köhler, currently in charge of Europe at Holcim;
• Asia Pacific: Ian Thackwray, currently in charge of East Asia Pacific and Trading at Holcim;
• Middle-East Africa: Eric Olsen, currently in charge of Operations at Lafarge;
• North America: Alain Bourguignon, previously in charge of North America and UK at Holcim;
• Latin America: Saâd Sebbar, currently in charge of Morocco at Lafarge;
• Performance and Cost: Urs Bleisch, currently in charge of Corporate Functions at Holcim;
• Growth and Innovation: Gérard Kuperfarb, currently in charge of Innovation at Lafarge;

In India both companies are well on track in preparing the merger of Holcim and Lafarge, with the future structure for the subcontinent to be announced in due course upon clearance by the Competition Commission of India.

The current executive committees of Holcim and Lafarge remain in charge and accountable for the activity and operations of their respective groups until completion of the merger. Both groups continue to operate entirely separately as competitors until the merger is completed.

The selection and nomination process for the rest of the leadership team is also well underway. Apart from the future executive committee, the following direct reports of the future CEO have been selected under project mode:

• Strategy and M&A, Christof Haessig, currently in charge of Corporate Finance and Treasury at Holcim;
• Communication, Public Affairs and Sustainable Development, Alexandra Rocca, currently in charge of Communication, Public Affairs and Sustainable Development at Lafarge;
• Legal, Xavier Dedullen, currently in charge of Legal & Compliance at Holcim;
• Health and Safety, Sapna Sood, currently in charge of Health and Safety at Lafarge.

France: Thierry Legrand has been appointed as senior vice president of transformation and acceleration at Lafarge's head office in Paris. Legrand has been the chief executive of Lafarge South Africa for five years. Kenneth MacLean, who is currently Lafarge group's senior vice president for performance aggregate, will replace him from 1 August 2014.

During his time in South Africa, Legrand integrated the company's local cement, aggregates, ready-mix concrete, gypsum and fly ash business lines into a country organisation and drove its ambition of contributing to building better cities. MacLean said that he was excited to be in South Africa and looked forward to the challenge.

France: The Vicat board of directors has appointed Guy Sidos as the new chairman, in addition to his current position as chief executive officer. The board also appointed Jacques Merceron-Vicat as honourary chairman.

Sidos, aged 51, is the son-in-law of outgoing chairman and former CEO Jacques Merceron-Vicat. His appointment is intended to continue Vicat's independent outlook. Sidos is a graduate engineer of France's Navy School. After joining the Vicat Group in 1999 he held a number of operational positions, particularly in the US, before being appointed COO in 2004, then CEO in 2008. He will henceforth hold this position alongside that of chairman after the annual general meeting on 6 May 2014.

France: Lafarge has announced changes to its Executive Committee due to start from 1 September 2013. Sonia Artinian and Peter Hoddinott will join existing committee members Eric Olsen, Guillaume Roux and Alexandra Rocca.

Sonia Artinian, currently Country CEO for Romania, is appointed as Executive Vice-President of Organization and Human Resources, taking over from Eric Olsen.

Artinian, a French national, joined Lafarge in 2008 as Senior Vice-President Organization, Learning and Development. She started her career as a strategy consultant, notably working for Cap Gemini Consulting. She is a graduate of École nationale de génie rural des eaux et forêts and of Ecole Normale Supérieure de Lyon (section biology).

Peter Hoddinott, currently Head of Energy and Strategic Sourcing at the Performance department, is appointed as Executive Vice-President of Performance, taking over from Guillaume Roux.

Hoddinott, a British national, joined Lafarge in 2001 with the acquisition of Blue Circle by Lafarge. He worked for the mining industry before joining Blue Circle in 1995, where he held several operational positions in the UK, before being appointed General Director for the Philippines in 1999. He is a graduate of Imperial College and holds a Master of Business Administration from London University.

Eric Olsen, currently Executive Vice-President Organization and Human Resources, is appointed Executive Vice-President of Operations, taking over from Jean-Carlos Angulo, who has decided to retire.

Olsen, a US national, joined Lafarge in 1999 after starting his career at Deloitte & Touche. He became Chief Financial Officer of Lafarge North America in 2004.

Olsen holds a Bachelor of Science degree in finance and accounting from the University of Colorado, and an MBA from the HEC international business school in Paris.

Alexandra Rocca, currently Senior Vice-President Group Communications, is appointed as Executive Vice-President Communications, Public Affairs and Sustainable Development.

Rocca, a French national, joined Lafarge in 2010 as Senior Vice-President Group of Communications and has been a member of the group Executive Committee since January 2012. She began her career at Printemps Group in 1986 with subsequent roles at Air Liquide Group, Galeries Lafayette and Crédit Agricole S.A. group. She is a graduate from the HEC international business school in Paris, the Institut d'Etudes Politiques in Paris and holds a BA in French literature.

Guillaume Roux, currently Executive Vice-President Performance, is appointed Executive Vice-President of Operations.

Roux, a US-French dual national, has spent his entire career with Lafarge which he joined in 1980 as an internal auditor. Subsequent roles since have included Chief Executive for Turkey in 1999, taking responsibility for Lafarge's cement operations in South-East Asia in 2002 and becoming Executive Vice President and Co-President of the Cement Division with the responsibility for the Cement business in Eastern Europe, the Middle East and Africa in 2006. In 2008 he supervised the integration of Orascom's operations with Lafarge. He is a graduate of the Institut d'Etudes Politiques in Paris.

France: Ciments Français, a subsidiary of Italcementi Group, has appointed Jean Paul Méric chairman of the board and Fabrizio Donegà as chief operating officer. Outgoing chairman Yves René Nanot, who has reached the statutory age limit, has been nominated honorary chairman of the company and will continue as a director.

Méric, aged 69, studied at the École Polytechnique and the École Supérieure d'Electricité. He began his career with EDF before moving into the cement industry, first with CERILH (Centre d'Études et de Recherches de l'Industrie des Liants Hydrauliques) then Ciments Français in 1985. He became the executive vice-president for Ciments Français in 1991 and was appointed chief operating officer in 2010.

Donegà, aged 49, is a graduate in Mechanical Engineering from Genoa University and a postgraduate in Corporate Finance from Bocconi University (Milan) and Management Development from Harvard Business School (USA). He started his career with Italcementi, first as Technical Assistance Manager in 1990 then as Plant Manager. In 1999 he was appointed manager in charge of Greece and Bulgaria. Since 2007 he has been the executive vice-president of Ciments Français.

France: Carlos Espina has been appointed as director of research and development for the Lafarge Group, with effect from 1 October 2012. Espina was previously the chief executive officer at ArcelorMittal Méditerranée, a position he had held since July 2009.

He began his career in the UK as a researcher at AEA Technology. In 1995 he joined the research and development (R&D) Centre of Aceralia Corporación Siderúrgica as manager of the product applications engineering department, before becoming vice president of intellectual property, knowledge management and artificial intelligence upon the merger with Arcelor in 2002. Within the Arcelor Mittal Group, he successively held the positions of vice-president in charge of R&D, Europe, and vice-president in charge of R&D, automotive.

Carlos Espina will be based at Lafarge's Research Centre near Lyons, with more than 250 researchers of 12 different nationalities. He holds a degree from Oviedo College of Mines in Spain.

France: Gérard Lamarche has been appointed as a director at Lafarge at its Ordinary General Meeting in Paris on 15 May 2012.

Lamarche graduated from the University of Louvain-la-Neuve with a Bachelor's degree in Economic Sciences and a specialisation in Business Administration and Management. He also completed the Advanced Management Program for Suez Group Executives at the INSEAD Business School.

He began his professional career in 1983 with Deloitte Haskins & Sells in Belgium, and became a mergers and acquisitions consultant in the Netherlands in 1987. In 1988, he joined the Venture Capital Department of Société Générale de Belgique as an investment manager. He became the special projects advisor to the president and secretary of the Suez board of directors in 1995 where he later became the group's senior vice president in charge of planning, control and accounts management. He was appointed senior executive vice president – finance of the Suez Group in March 2004, becoming executive vice president - finance of GDF SUEZ, and member of the management and executive committees of the GDF SUEZ Group in July 2008.

Lamarche is a director of Groupe Bruxelles Lambert (Belgium) and has been a managing director since January 2012. Lamarche is also a Director of Total and Legrand.

Pascal Casanova has become the general director of Lafarge France, a unit of the French cement giant Lafarge. Casanova was born in 1968 and joined Lafarge in 1999 after having been employed by a number of different construction firms. He served as Lafarge's research and development director since 2008.