Holcim Board Rejects Lafarge Merger Terms
Swiss-based Holcim has rejected the terms of a proposed $44.27 billion tie-up
France-based Lafarge said it received a letter on Sunday from the chairman of Holcim’s board saying the company doesn’t want to pursue their previous agreement that was approved last July and is “challenging the financial terms and governenance structure of the proposed merger of equals.”
Lafarge said its board of directors “remains committed” to the merger and is “willing to explore the possibility of a revision of the parity.”
The original deal, which would create the world’s largest cement maker, was dubbed “a merger of equals” and would involve a capital increase on Holcim’s part to meet a one-to-one share exchange. That share-exchange ratio is now rejected, though Lafarge has said it is willing to renegotiate.
In a separate statement, Holcim confirmed that its board would no longer pursue the combination in its current form but had proposed renegotiating the deal’s one-for-one exchange ratio and “governance issues,” most likely a reference to management of the combined company. Lafarge had agreed to discuss the exchange ratio, according to the Holcim statement, but wouldn’t renegotiate the rest of the deal.