Holcim and Lafarge progressing in last-ditch talks to salvage merger

Holcim and Lafarge are progressing in last-ditch talks to salvage their merger to form the world's biggest cement company as one of the largest shareholders signalled support for a compromise on leadership.

The companies have reached an understanding to make Lafarge head Bruno Lafont co-chairman of the new entity alongside Holcim chairman Wolfgang Reitzle following resistance to Mr Lafont becoming chief executive of the merged company, people familiar have previously said.

“Bruno Lafont and Wolfgang Reitzle will ensure the future integration and success of that venture,” Egyptian billionaire Nassef Sawiris, who is Lafarge’s second-biggest shareholder, said in a telephone interview.

He declined to specify their roles, but said Mr Lafont was “key to the success of major milestones” including synergies achieved before and after the merger was announced last year.

Holcim has been questioning Mr Lafont’s ability to reach savings targets after it outperformed its French partner on everything from sales to profit. Mr Lafont and Holcim managers have also clashed over issues including leadership style and strategy, according to the people.

Another Lafarge executive is likely to be chosen as the new chief executive of the combined entity instead, they said. A preliminary agreement on adjusted financial terms and leadership changes could be reached as early as Thursday, according to the people, who cautioned that talks may drag on longer or yet fall apart.

Shareholders of CRH, which has agreed to buy €6.5 billion in assets that Holcim and Lafarge need to sell for regulatory approval, approved the purchase on Thursday morning.

Bloomberg