Europe’s two largest cement companies Holcim and Lafarge have rescued a stumbling $44.3 billion (41 billion euros) merger by reconciling differences over financial terms and management that nearly caused the collapse of one of the biggest deals in recent years, reported the Financial Times.
The agreement ends several days of intense negotiations to salvage a deal aimed at creating enormous cost savings and a powerhouse in the cement and crushed stone industry.
What was initially agreed as a one-for-one share deal when it was announced last April will now be adjusted in favor of Holcim, after the Swiss company outperformed its French rival financially and saw the relative value of its shares enhanced by the strengthening of the Swiss franc.
Under the new arrangement, Holcim will pay about 0.90 of its shares for each one in Lafarge, people familiar with the matter said.
In addition, Bruno Lafont, chief executive of Lafarge, is now set to become co-chairman of the combined group rather than its new head.
As the two companies have worked on integration matters, Holcim’s senior management has grown concerned in recent months over Lafont’s ability to meld two distinct business cultures and to deliver on the $1.5 billion (1.4 billion euros) in annual cost savings promised by the two companies.
He will share the chairman role of the enlarged entity with Wolfgang Reitzle, Holcim chairman.