CRH has dispatched integration teams to meet with executives from the Holcim-Lafarge business it is due to acquire, as it presses ahead with the €6.5 billion transaction after a last-minute agreement salvaged the deal.
Industry sources confirmed that CRH executives have started "engagement meetings" with managers from Holcim and Lafarge, who are selling a range of businesses in Europe, Asia and the Americas to CRH to satisfy competition concerns as a result of their €40 billion merger.
The merger stalled on Monday after Swiss company Holcim asked for a bigger slice of the deal agreed last July. It also pushed to oust the merged companies' proposed chief executive, Lafarge's Bruno Lafont, before he even started.
Compromise
The CRH acquisition was contingent upon the merger’s consummation, and the largest deal in Irish corporate history hung in the balance while Holcim and Lafarge negotiated a compromise.
It was announced yesterday that a deal was reached. The share price of CRH surged ahead by more than 5 per cent at the close of business following the news.
As part of the compromise, Mr Lafont will now become co-chairman of the new entity alongside Holcim chairman Wolfgang Reitzle. Holcim will also pay 0.90 of a share in return for one share of Paris-based Lafarge, instead of the original one-to-one ratio.
A new chief executive will be proposed to both boards in coming weeks, Mr Lafont said. A Lafarge candidate for the role has been identified, according to people familiar with the matter. Beat Hess, a high-profile Swiss executive and board director at Holcim, will be vice-chairman.
Shareholders
At least two-thirds of Holcim shareholders still must approve a capital increase.
For CRH, the acquisition will catapult it into third spot in the global rankings of building materials groups.
It is due to acquire a wide range of assets, the bulk of which are in Europe but the job lot also includes a cement plant in the Philippines. Albert Manifold, chief executive of CRH, will oversee the integration of 15,000 new employees in 685 sites.
The company’s revenues will rise from about €19 billion to more than €24 billion, while earnings will increase from €1.6 billion to €2.4 billion. At a shareholders meeting on Thursday to rubber stamp the deal, while Holcim-Lafarge talks were ongoing, Mr Manifold said CRH would be interested in buying some of the assets even if the merger fell apart.
– (Additional reporting: Bloomberg)
