Holcim and Lafarge, Europe’s two biggest cement groups by sales, are in talks to renegotiate the terms of their €41bn merger after a divergence in the value of the two companies over the past year.
According to people familiar with the matter, the two sides are holding discussions that might result in changes to the terms of the one-for-one share deal announced last April.
A combination would create a cement and crushed rock powerhouse in many of the largest markets, with revenues of €40bn annually but a reduced European presence.
In recent weeks, however, Holcim shareholders have raised concerns over the terms of the deal.
A representative for the family of Thomas Schmidheiny, the Holcim founder and its largest investor with a fifth of the shares, told Reuters on Monday: “The industrial logic of the deal is undisputed.” He did not comment on the price.
The remarks came after a SonntagsZeitung report at the weekend that Mr Schmidheiny wanted the terms of the deal renegotiated.
Holcim’s second largest shareholder, Eurocement, which is owned by Russian Filaret Galchev and holds 10 per cent of the shares, has not publicly supported the deal. Eurocement declined to comment.
Holcim spokesman Peter Stopfer said: “The status remains unchanged. Both companies continue to work on different workstreams to complete the planned merger. We cannot comment further.”
Lafarge declined to comment.
Switzerland-based Holcim has outperformed its French rival since the transaction was announced. Its valuation has also benefited from the Swiss franc’s appreciation.
In euro terms, shares in Holcim have returned a total of 6.8 per cent versus a loss of 0.6 per cent for Lafarge shares. Holcim is worth €23bn to Lafarge’s €18.5bn. That compares with respective values last April of €21bn to €18.4bn.
News of the latest discussions comes just weeks before Holcim was expected to hold a shareholder vote, where it will need two-thirds of those present to approve the deal.
Both companies have been at pains to present the deal as a merger rather than a takeover although, even under the deal’s original terms, Holcim would have paid a small premium to acquire Lafarge.
Any change to the share exchange ratio would be likely to stir political controversy in France, where the government has resisted takeovers of domestic companies by foreign rivals.
The deal — which potentially ran foul of competition rules in at least 13 countries, including Canada, France and Spain — was partially approved by the European competition authorities in December.
Remedies proposed by Holcim and Lafarge to address EU concerns involved disposing of one company’s assets in most of the European countries in which the new combined company would operate.
In February the two companies agreed to a series of asset sales to their smaller Irish rival CRH for €6.5bn.