The pending merger between cement giants Holcim and Lafarge has come to a halt after Holcim’s board of directors “concluded that the combination agreement can no longer be pursued in its present form,” according to a released statement by the board. It “has proposed to enter into negotiations in good faith around the exchange ratio and governance issues.”

The two companies originally agreed to merge on a one-for-one share exchange ratio. However, in recent weeks, Holcim shareholders expressed reservations about the all-stock deal as the company’s share prices have fared better than those of Lafarge. According to the Reuters, Holcim proposed changing the agreed share exchange ratio to 0.875 Holcim shares for each Lafarge share, but Lafarge wants a 0.93 to 1 ratio.

Holcim also wants a larger role in running the combined group than what was initially agreed upon, including the position of chief executive which was to be helmed by Lafarge CEO Bruno Lafont. Reuters quoted a person familiar with the situation stating that Holcim no longer accepted that Lafont should head the merged company.

In a released statement, Lafarge said that while it remained committed to the project it was willing to discuss the exchange ratio but would “not accept any other modification of the terms of the existing agreements.”

[UPDATE - March 19, 2015]

Both companies are discussing new leadership for the combined group, which would give Lafarge's CEO Bruno Lafont a lesser role, according to people familiar with the matter. It is being reported that Lafont could be named co-chairman of the future company alongside Wolfgang Reitzle, the current chairman of Holcim.

Another Lafarge executive is likely to be chosen as the new CEO of the combined entity. Lafarge's financial director Jean-Jacques Gauthier is a possible candidate for the post, sources familiar with the matter told Reuters.

The discussions over the leadership as well as the share exchange ratio of the deal are continuing and could still evolve or break down. The boards of both companies met yesterday to discuss the compromise, and a preliminary agreement could be reached as early as today.

Shareholders of Ireland’s CRH Plc, which agreed to buy $6.9 billion in assets that Holcim and Lafarge needs to sell for regulatory approval, approved the purchase earlier today.

CRH CEO Albert Manifold noted that CRH is in “close dialogue” with both companies and spoke to their representatives earlier today, adding that he’s confident the merger will happen.

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