Cement firm Holcim and Lafarge have announced that they are lining up a multi-billion-euro sell-off in bid to ensure that their attempt to create a €40 billion (£33 billion) “global champion” sticks.
The two said the “merger of equals” could yield savings of up to €1.4 billion a year, but they face battles with politicians and regulators. A French MP today complained in a tweet that the group’s “centre of gravity” was shifting to Switzerland, where the firm — which will be called LafargeHolcim — will be headquartered.
Outgoing Holcim chairman Rolf Soiron admitted: “We are facing exactly the same criticism.” But he added: “I say look, this is a European situation. Unless we are capable of creating global champions, Europe has no chance of succeeding.”
He also insisted that there would not be major redundancies despite the huge savings the two companies said the merger would reap. Soiron said the sell-offs would mean staff will simply “find other employers”.
Planned disposals will represent 10 per cent-15 per cent of sales. Bruno Lafont, current chief executive of Lafarge who will fill that role in the new company, said they were opening talks with watchdogs “in a spirit of co-operation”.
But this could represent a challenge. Both have been involved in dust-ups with cartel-busters in the past. Lafarge paid a fine of €249.6 million fine to the EU after an eight-year battle in 2010.
Broker UBS warned antitrust will be a “material issue” in key markets including the UK. It added: “Given the number of potential issues and required remedies, we expect a lengthy approval process.”
The European Commission has also been investigating the two companies and six others for operating a suspected cartel in cement and cement-based products since the end of 2010. Holcim’s chairman-designate Wolfgang Reitzle will oversee a 14-member board.