Displaying items by tag: Europe

Europe: Ireland's CRH is assuming that the LafargeHolcim merger will still happen, according to CRH chief executive Albert Manifold. "At this moment in time, we're working forward on the basis that the deal will close, the merger will happen," said Manifold. He added that he had spoken to both companies on 19 March 2015.

CRH has agreed to buy a number of mostly European assets from Lafarge and Holcim for Euro6.5bn so that Lafarge and Holcim can get antitrust clearance for their plan to merge. According to Reuters, CRH's shareholders voted to approve the acquisition on 19 March 2015 at its extraordinary general meeting. According to Manifold, the CRH vote was a procedural step that had to be done, regardless of the uncertainty at Lafarge and Holcim, as a failure to approve the asset purchase would have left CRH exposed to a potential Euro158m break-up fee.

Manifold also confirmed that if the merger should fail, the break-up fee would apply in the other direction. "Likewise, if other parties don't conclude this deal for whatever reason, we would then be in receipt of a break fee," said Manifold. "I'm not going to speculate on whether it is or isn't going to happen. There are discussions going on to decide what they want to do over the next couple of days," said Manifold, adding that CRH was interested in buying the assets even if the merger falls through.

According to CRH, the LafargeHolcim assets would transform CRH into the world's third-largest building materials supplier, the biggest in central and eastern Europe, and double its presence in emerging markets. CRH makes about half its sales in the US and wants more exposure to new markets such as the Philippines and parts of Europe it believes are beginning to recover.

Manifold said that CRH also has its eye on other acquisitions, should the purchase of Lafarge and Holcim assets fall through. "This deal is an important part of the strategy of CRH, but it is not the strategy of CRH," said Manifold.

Europe: Holcim's board of directors has determined that its merger with Lafarge will be delayed due to the disagreement of terms on the deal. In a statement, Holcim said that the agenda for its upcoming annual general meeting will only focus on direct Holcim business and not the merger.

According to local media, Lafarge and Holcim are discussing a change in the planned leadership of their combined company to rescue the merger amid growing resistance to Lafarge CEO Bruno Lafont taking the top job. The companies are considering naming another Lafarge executive as CEO instead of Lafont to address demands from Holcim that would allow the deal to go ahead. Lafont could become co-chairman of the new entity, together with Holcim chairman Wolfgang Reitzle. The appointments are among various management changes being discussed.

Europe: The boards of Lafarge and Holcim met separately on 17 March 2015 to try and salvage their merger.

According to Reuters, one source said ahead of the Lafarge board meeting that Lafarge would not accept renegotiations on the governance of LafargeHolcim. The original merger agreement designated a board made up of seven members from each company and Lafarge boss Bruno Lafont as CEO. "The board cannot give satisfaction to Holcim on all points," the source said. "It cannot accept both a change of parity and a taking of control."

On 15 March 2015, Holcim said that it wanted to open talks on the exchange ratio and on 'governance issues' because the original merger terms were no longer acceptable to its board. Lafarge said on 16 March 2015 that it would consider revising the share exchange ratio, but nothing else. According to another source, Holcim has proposed changing the previously-agreed 1:1 exchange ratio to 0.875 Holcim shares for each Lafarge share, but Lafarge wants a 0.93:1 ratio.

One Holcim shareholder who opposes the deal reportedly said that the appointment of Lafarge's Lafont as head of LafargeHolcim has become a bone of contention, with some questioning his ability to deliver promised cost savings of Euro1.4bn/yr.
Ireland's CRH, which planned to buy a large portion of Lafarge and Holcim's assets to appease competition authorities, could experience collateral damage if the merger is cancelled. According to Reuters, if the merger fails, CRH is still liable for a break-up fee of Euro158m.

Europe: A conflict between Lafarge and Holcim has deepened as both groups have acknowledged that the terms of their proposed 'merger of equals' may have to be revised to reflect diverging valuations, according to Reuters.

The merger 'Can no longer be pursued in its present form,' said Holcim said in a statement on 16 March 2015. It has proposed a renegotiation of the share exchange ratio and 'governance issues.' Lafarge is willing to consider revising the share-exchange ratio in the merger, but not other aspects of the deal, it said in a separate statement.

The deal announced in April 2014 was intended to combine Lafarge and Holcim on an equal basis, but diverging results, share prices and fluctuations in the Euro and Swiss Franc have led Holcim to seek a revision of the terms. Holcim has proposed changing a proposed 1-1 share exchange ratio to 0.875 Holcim shares for each Lafarge share, according to news reports. Lafarge is said to be planning a counter proposal that would trim its weighting to 0.93 to complete the deal.

Europe: Holcim and Lafarge are in talks to renegotiate the terms of their Euro41bn merger after a divergence in the value of the two companies over the past year. The two sides are holding discussions that might result in changes to the terms of the one-for-one share deal announced last April 2015, according to The Financial Times.

It in unclear how the renegotiation might affect CRH, which agreed in February 2015 to pay Euro6.5bn for assets being sold by the two companies as they sought to address potential competition concerns over the deal.

In recent weeks Holcim shareholders have raised concerns over the terms of the deal, most vocally a representative for the Schmidheiny family, which is Holcim's largest investor. Thomas Schmidheiny, head of the family and a former Holcim chairman, wanted the terms of the deal renegotiated. Holcim's second largest shareholder, Eurocement, which is owned by Russian Filaret Galchev and holds 10% of the shares, has not publicly supported the deal.

Europe: Holcim's largest stakeholder, Thomas Schmidheiny, wants a better deal for the Holcim's shareholders in its planned merger with Lafarge, according to Swiss Newspaper SonntagsZeitung, which cited people close to Schmidheiny.

The merger with France's Lafarge to create the world's biggest cement company was agreed on 7 April 2015, but analysts have since flagged a potential divergence between the two companies' earnings prospects, raising the possibility of a renegotiation of terms.

SonntagsZeitung said that Holcim board member Schmidheiny, who owns 20.1% of the company according to Thomson Reuters data, sees two possible solutions. One is to weigh the exchange ratio of shares in favour of Holcim investors. Another is a special dividend. The paper also quoted another board member as saying the deal will not work in its current form, which includes each Lafarge share being swapped for one Holcim share.

SonntagsZeitung has also reported that Swiss shareholder group Ethos, which represents around 200 pension funds, is against the deal as it stands and will tell Holcim's board that it will advise members to vote against the merger unless there is a change to the exchange ratio.

Europe: As announced on 7 April 2014, Holcim and Lafarge have entered into a business combination agreement on terms previously agreed, subject to various closing conditions. The transaction must be approved by 66% of Holcim's shareholders in an extraordinary general meeting, while 66% of Lafarge's shareholders will need to accept Holcim's exchange offer launched pursuant to French takeover rules.

Europe: Holcim is considering offering its shareholders a sweetener to win their approval for a planned merger with Lafarge, according to Swiss newspaper Sonntagszeitung.

Sonntagszeitung said that Holcim was looking at several 'creative methods' to sway its shareholders into backing the deal, including a generous special dividend or a share buyback, instead of trying to alter the terms of the deal, which involves a one-to-one share swap. However, Holcim's chief executive Bernard Fontana said that the merger agreement did not contain any mechanisms by which the terms could be automatically adjusted. Sonntagszeitung said that Holcim was considering the sweetener in response to opposition from its shareholders to the deal, which hinges on investor approval for a capital increase for financing.

Europe: Holcim's cement and clinker sales fell by 10.5% in Croatia and by 5.4% in Serbia in 2014. In Croatia, sales prices rose by 0.5%, while in Serbia, they rose by 0.3%. In contrast, Holcim's cement and clinker sales rose by 7.8% in Romania and by 2.4% in Bulgaria. In Romania domestic prices fell by 1.2%, while they rose by 1.1% in Bulgaria.

Europe: Holcim and Cemex have announced the successful closure of a series of transactions in Europe.

Holcim has acquired Cemex's operations in western Germany and the Netherlands, while Cemex has taken over Holcim Czech Republic with all of its subsidiaries in that country. In Spain, Cemex has purchased Holcim's Gador cement plant and Yeles grinding station, while Holcim keeps its remaining operations.

As a result of the transactions, Cemex paid Holcim Euro45m in cash. Holcim expects sustainable additional operating earnings before interest, taxes, depreciation and amortisation (EBITDA) of at least Euro10m/yr.