The French Lafarge’s fusing process with the Swiss Holcim, which has been frozen in recent months, received Friday a strong push that will result in the creation of the largest cement group in the world. The leaders of the two companies issued a statement which ensure that the divergences that were delaying an effective understanding were completely overcome.
“The project to combine the operations of Lafarge and Holcim and create the most advanced company of the cement industry in the world has just taken a major step forward,” write the leaders of the two companies in a joint statement issued Friday.
The search for a formal understanding has intensified in recent weeks, and especially after last Sunday, the Board of Directors of Holcim have sent a kind of ultimatum to the leaders of Lafarge.
In the letter sent to Paris, Holcim demanded, first, that the merger conditions were changed in a better perspective of what was planned for the shareholders of Swiss company. And asked that the composition of the new governing bodies also had a stronger weight members indicated by them, as well as disagreement with the claim of Lafarge to put as CEO of the new company its own CEO -. Bruno Lafont
After a debate that lasted a few days, Lafarge finally gave in to the wishes of the Swiss company. Regarding the composition of share exchange values, it was accepted that the shareholders of Holcim shall be entitled to 10 titles of the new company for every nine currently have, while Lafarge are ten by ten in their possession. The previous proposal, the terms of trade were ten by ten to each side. All shareholders will also be entitled to an award of an extra action in the new company for every 20 who currently hold.
As for the distribution of power in the new company, was also reached an agreement which provides that there are two co-chairmen (non-executive chairs) and that these positions are occupied by Bruno Lafont and the current chairman of Holcim, Wolfgang Reitzle. The joint statement said the two managers “will work together to ensure that the potential for value creation of this merger will be achieved for the benefit of all shareholders.”
In this context, the new CEO ( CEO) should be someone independent of the two companies, with official indications that your profile is drawn and there even have a list of names that can be chosen to take over.
At a meeting with journalists in yesterday morning, Bruno Lafont searched dispel the notion that ran behind the scenes of the problems that industry were to complicate the merger not boiled down to price and musical chairs, and that had to do with different views on what should be the new company strategy and operational leadership in a group that has global presence. Lafont held that a merger of this size can not “happen without moments of tension.”
The new company will have a market capitalization of around EUR 45 billion and an active presence in about a hundred countries. The merger will boost annual synergies of 1400 euros in a group will be to employ 161,000 people.
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