Holcim and Lafarge to Combine Operations

Holcim Ltd of Switzerland and Lafarge SA of France have announced their intention to combine operations. The move has the unanimous approval of both boards of directors and the full support of core shareholders of both companies. The combined company, LafargeHolcim, would have an enhanced presence in the global building materials sector with the number one position globally across cement, concrete and aggregates. Sales of the two companies in 2013 totaled €32 billion (US$44.2 billion). After a strategic optimization of the portfolio through a pro-active divestment process, in anticipation of regulatory requirements, LafargeHolcim would occupy complementary positions. The combined operations would include production sites located in 90 countries across the globe. No country would account for more than 10% of revenues. In order to ensure efficient execution of the merger, expected to close in the first half of 2015, an integration committee will prepare the integration plan to be implemented straight after closing. Lafarge generated 2013 EBITDA of €3.1 billion (US$4.3 billion) on sales revenue of €15.2 billion (US$21.0 billion). The company sold 136.8 million tons of cement and 192.8 million of aggregates. The company’’s North America operations accounted for 20.6% of the revenue at €3.14 billion (US$4.34 billion) and 18% of EBITDA at €560 million (US$773.5 million). Lafarge operates 12 cement plants and five grinding plants in North America with a production capacity of 16.5 million tonnes/year. The company also operates about 150 aggregates mines that sold 92.3 million tonnes in North America in 2013. Holcim generated an operating EBITDA in 2013 of CHF 3.9 billion (US$4.4 billion) on net sales of CHF 19.7 billion (US$22.4 billion). The company sold 138.9 million tonnes of cement and 154.5 million tonnes of aggregates. The company’’s North American operations accounted for 16.1% of revenue at CHF 3.2 billion (US$3.6 billion) and 13% of EBITDA at CHF 494 million (US$561 million). Cementos Argos of Columbia has agreed to pay €50 million (US$69.1 million) for a French Guiana company jointly-owned by Lafarge and Holcim. Earlier this year Argos purchased Vulcan Materials Inc’s cement and concrete businesses in the Florida area.

Volume 28 issue 8

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