Swiss Holcim and French Lafarge agreed to merge so that to create the world’s biggest cement maker, Paris-based Lafarge said. The annual sales are expected to post up to €32 billion.
Lafarge shareholders will be able to exchange each share they hold for a Holcim share. The new company named LafargeHolcim is supposed to be headquartered in Switzerland, while it will have been operating in Paris and Zurich.
The joint market capitalization will come in at €40billion. It is believed that the merger will save both companies about €1.4 billion a year. The pair is going to sell some assets to persuade the antitrust enforcers to allow the creation of LafargeHolcim at that.
The main goal that the partners are striving for is to retain their share on the market amid the price hikes and low demand. The global financial crisis of 2008 and the euro area’s fiscal crisis, which started in 2010, have hit the field greatly.
Besides, the two companies do not compete with each other outside Europe. The thing is the Lafarge non-European consumers are in Africa and the Middle East, while Holcim dominates in the Latin American market.
