Holcim’s No. 2 Investor Said to Plan Vote Against Lafarge Merger
2015-03-27 23:00:01.0 GMT
By Francois de Beaupuy and Jan-Henrik Förster
(Bloomberg) -- Holcim Ltd.’s second-biggest shareholder,
Eurocement Holding AG, plans to vote against the Swiss company’s
merger with Lafarge SA, even after the cement makers last week
agreed on new terms and management changes to placate investors,
said a person familiar with the matter.
Eurocement isn’t satisfied with the revised terms, which
would give 0.9 of one Holcim share for one share of Lafarge,
instead of the original one-for-one ratio, the person said,
asking not to be identified because the considerations are
private. The investor is also seeking other improvements, the
person said. Representatives for Eurocement couldn’t immediately
be reached for comment. Holcim and Lafarge declined to comment.
The initial terms and management lineup became a sticking
point after Lafarge’s results lagged its Swiss peer since the
merger was announced in April last year. Lafarge chief Bruno
Lafont, who had been designated as chief executive officer of
the merged company, will now become co-chairman, after Holcim
managers said they didn’t want him as CEO.
The continued opposition by Russia’s Eurocement, which
holds 10.8 percent of the Swiss cement maker, could derail the
merger if other investors follow suit. Two thirds of
shareholders need to approve a capital increase that is
necessary for the deal to go through at an investor meeting in
May.
Earlier this week, Ethos foundation, which advises Swiss
pension funds, said that it also still has doubts about the
combination of both companies. Funds advised by Ethos may
represent about 4 to 5 percent of investors at the meeting.
Holcim’s fourth-biggest shareholder, Harris Associates,
told newspaper Finanz und Wirtschaft yesterday it hasn’t decided
yet whether to support the merger as the new terms are “not
perfect.”
Holcim and Lafarge have predicted the merger will lead to
cost savings of 1.4 billion euros ($1.5 billion) annually,
giving them an advantage over rivals after the global recession
eroded demand for building materials and forced some kilns to
run at a loss.
For Related News and Information:
Lafarge-Holcim Said to Mull Lafont as Co-Chairman for Merger
Lafarge Forecasts 2015 Profit Gains as Cement Markets Revive
CRH Buys Cement Assets From Holcim-Lafarge for $7.3 Billion
Holcim earnings graph: HOLN VX <Equity> FA ISBAR <GO>
Holcim enterprise value: HOLN VX <Equity> EV <GO>
Top Swiss stories: TOPS <GO>
Bloomberg Intelligence building-materials: BI BMATG <GO>
Top deal news: DTOP <GO>
Real M&A columns: NI REALMNA <GO>
Top Stories: TOP<GO>
To contact the reporters on this story:
Francois de Beaupuy in Paris at +33-1-5365-5051 or
fdebeaupuy@bloomberg.net;
Jan-Henrik Förster in Zurich at +41-44-224-4116 or
jforster20@bloomberg.net
To contact the editors responsible for this story:
Simon Thiel at +44-20-3525-2814 or
sthiel1@bloomberg.net
Molly Schuetz
2015-03-27 23:00:01.0 GMT
By Francois de Beaupuy and Jan-Henrik Förster
(Bloomberg) -- Holcim Ltd.’s second-biggest shareholder,
Eurocement Holding AG, plans to vote against the Swiss company’s
merger with Lafarge SA, even after the cement makers last week
agreed on new terms and management changes to placate investors,
said a person familiar with the matter.
Eurocement isn’t satisfied with the revised terms, which
would give 0.9 of one Holcim share for one share of Lafarge,
instead of the original one-for-one ratio, the person said,
asking not to be identified because the considerations are
private. The investor is also seeking other improvements, the
person said. Representatives for Eurocement couldn’t immediately
be reached for comment. Holcim and Lafarge declined to comment.
The initial terms and management lineup became a sticking
point after Lafarge’s results lagged its Swiss peer since the
merger was announced in April last year. Lafarge chief Bruno
Lafont, who had been designated as chief executive officer of
the merged company, will now become co-chairman, after Holcim
managers said they didn’t want him as CEO.
The continued opposition by Russia’s Eurocement, which
holds 10.8 percent of the Swiss cement maker, could derail the
merger if other investors follow suit. Two thirds of
shareholders need to approve a capital increase that is
necessary for the deal to go through at an investor meeting in
May.
Earlier this week, Ethos foundation, which advises Swiss
pension funds, said that it also still has doubts about the
combination of both companies. Funds advised by Ethos may
represent about 4 to 5 percent of investors at the meeting.
Holcim’s fourth-biggest shareholder, Harris Associates,
told newspaper Finanz und Wirtschaft yesterday it hasn’t decided
yet whether to support the merger as the new terms are “not
perfect.”
Holcim and Lafarge have predicted the merger will lead to
cost savings of 1.4 billion euros ($1.5 billion) annually,
giving them an advantage over rivals after the global recession
eroded demand for building materials and forced some kilns to
run at a loss.
For Related News and Information:
Lafarge-Holcim Said to Mull Lafont as Co-Chairman for Merger
Lafarge Forecasts 2015 Profit Gains as Cement Markets Revive
CRH Buys Cement Assets From Holcim-Lafarge for $7.3 Billion
Holcim earnings graph: HOLN VX <Equity> FA ISBAR <GO>
Holcim enterprise value: HOLN VX <Equity> EV <GO>
Top Swiss stories: TOPS <GO>
Bloomberg Intelligence building-materials: BI BMATG <GO>
Top deal news: DTOP <GO>
Real M&A columns: NI REALMNA <GO>
Top Stories: TOP<GO>
To contact the reporters on this story:
Francois de Beaupuy in Paris at +33-1-5365-5051 or
fdebeaupuy@bloomberg.net;
Jan-Henrik Förster in Zurich at +41-44-224-4116 or
jforster20@bloomberg.net
To contact the editors responsible for this story:
Simon Thiel at +44-20-3525-2814 or
sthiel1@bloomberg.net
Molly Schuetz