Lafarge and Holcim have taken a further step towards their planned merger of equals to create LafargeHolcim, which it is said will be the most advanced and innovative group in the building materials industry. A Divestment Committee was set up by both companies, following the announcement of the planned merger on 7 April, with the aim of taking forward the divestment process. It has drawn up a list of proposed asset disposals to anticipate potential competition authorities’ requirements.
Lafarge and Holcim have taken a further step towards their planned merger of equals to create LafargeHolcim, which it is said will be the most advanced and innovative group in the building materials industry.
A Divestment Committee was set up by both companies, following the announcement of the planned merger on 7 April, with the aim of taking forward the divestment process. It has drawn up a list of proposed asset disposals to anticipate potential competition authorities’ requirements.
The latest announcement represents a major part of the total assets that the two companies aim to divest.
The two companies are proposing the following disposals: Europe
- Austria: Lafarge’s Mannersdorf cement plant.
- France: Holcim’s assets in metropolitan France, except for its Altkirch cement plant and aggregates and readymix sites in the Haut-Rhin market. Lafarge’s assets on Reunion island, except for its shareholding in Ciments de Bourbon.
- Germany: Lafarge’s assets.
- Hungary: Holcim’s operating assets.
- Romania: Lafarge’s assets.
- Serbia: Holcim’s assets.
- The UK: Lafarge Tarmac assets with the possible exception of one cement plant.
The future LafargeHolcim group will have a significant and balanced industrial base in Europe, around 20% of its revenues, within its overall global footprint, enabling it to take advantage of the European economic recovery.
In other countries the disposals planned are:
- Canada: Holcim’s assets.
- Mauritius: Holcim’s assets.
- The Philippines: the associated companies of Lafarge and Holcim (Lafarge Republic Inc/ LRI and Holcim Philippines) are exploring the combination of their businesses other than LRI’s Bulacan, Norzagaray, and Iligan plants which are considered to be divested as part of such combination.
In Brazil, Holcim and Lafarge will file soon with the Brazilian regulator, CADE (Conselho Administrativo de Defesa Econômica), and propose a comprehensive and high quality package of divestments, which include three integrated cement plants and two grinding stations (with a total of 3.6 million tonnes annual cement capacity), as well as one ready-mixed plant all located in the south-eastern region of Brazil. The proposed assets for disposal include Lafarge’s Matozinhos cement plant; Lafarge’s Arcos Jazida cement plant; Holcim’s Cantagalo cement plant; Lafarge’s Arcos Cidade cement grinding station; Lafarge’s Santa Luzia cement grinding station, and Holcim’s Pouso Alegre ready-mixed plant.
Brazil is an important market for the future LafargeHolcim Group and the company says it will remain committed to the country, serving customers from a balanced network in cement, aggregates, and ready-mixed concrete.
These proposed divestments have been presented to CADE in the context of pre-filing negotiations and will now be subject to review and further discussion until a final decision is reached with the authority.
The whole divestment process will be carried out in the framework of the relevant social processes and ongoing dialogue with the employee representatives’ bodies and will be conducted in parallel to discussions with the competition authorities and potential buyers. The divestment process will be completed subject to the closing of the merger between Holcim and Lafarge.
As announced, the closing of the planned merger is expected in H1 2015, aiming to create the most balanced and diversified portfolio in the industry, operating in 90 countries and creating superior value for its stakeholders.
Both companies says they will continue to consider whether divestments would be necessary where there might be overlaps or depending on regulatory requirements, and these proposed divestments are subject to review and further discussions with the regulatory authorities and to the agreement of the companies’ business partners when relevant.
The divestment process will be carried out in the framework of the relevant social processes and ongoing dialogue with the employee representatives’ bodies and will be conducted in parallel to discussions with the competition authorities and potential buyers. The divestment process will be completed subject to the closing of the merger between Holcim and Lafarge.
The announcement from both companies follows the formal signing of the combination agreement, marking the conclusion of the merger terms announced on April 7, 2014. The combination remains conditional on the required regulatory and other customary consultations and approvals.
As announced, the closing of the planned merger is expected in H1 2015, aiming to create” the most balanced and diversified portfolio in the industry, operating in 90 countries and creating superior value for its stakeholders.”
