LafargeHolcim List Assets for Disposal to Win Backing

Holcim Ltd. (HOLN) and Lafarge SA (LG), seeking antitrust backing for a planned $40 billion merger, outlined an initial list of assets for sale to cut the importance of Europe to 20 percent of combined revenue and win regulatory backing.

As part of a program of disposals, Anglo American Plc (AAL) will sell Lafarge its stake in a tarmac and aggregates venture for at least 885 million pounds ($1.5 billion) as a prelude to Holcim and Lafarge divesting most of that business, the companies said in a statement today.

“We have received a lot of interest, which is above expectations if I listen to our bankers,” Lafarge Chief Executive Officer Bruno Lafont said on a call. “It’s the first time in the history of the industry that such a large number of assets is for sale to anticipate the requirements of the regulatory authorities.”

The French and Swiss companies plan to complete the merger in the first half of 2015, with Europe accounting for the bulk of the divestments as the region has the biggest overlap. The proposed disposals announced today represent 10 percent of the $40 billion in combined sales of the two cement groups and are a major part of what will be divested to satisfy antitrust regulators, Holcim CEO Bernard Fontana said on the call.

Marks of Interest

Jona, Switzerland-based Holcim has hired Credit Suisse Group AG and HSBC Holdings Plc, and Paris-based Lafarge is working with Morgan Stanley and BNP Paribas SA, people with knowledge of the situation said June 20. Combined, the assets may fetch as much as 5 billion euros ($6.8 billion), they said.

LafargeHolcim will start talks with suitors immediately, Lafont said, adding that more buyers may come forward now that a list of asset is public. LafargeHolcim already received about 50 “marks of interest” from financial and industrial buyers, Fontana said.

Lafarge shares fell 0.4 percent in Paris at 9:15 a.m., while Holcim declined 0.3 percent in Zurich.

European plants earmarked for divestment span sites from Austria to Serbia, including assets in France, Germany and Romania. Outside the region, disposals will include sites in Canada, Mauritius and Brazil.

Announcing a list of planned European sales helps to ease the merger‘s evaluation process with regulators, Fontana said. Lafarge and Holcim are in preliminary discussions with EU authorities about filing for approval, a prerequisite for the plan to create the world‘s largest cement company. The two companies will make their official filing to regulators this summer, Fontana said.

Cement rivals and private-equity firms are expected to consider the assets. Companies include Eurocement Group, owned by Georgia-born Filaret Galchev and Holcim’s second-largest shareholder, Germany’s HeidelbergCement AG (HEI), Ireland’s CRH Plc and Cemex SAB, the biggest cement maker in the Americas, the people said last month.

Private-equity firms CVC Capital Partners Ltd. and KKR & Co. are also considering bids, the people said.

To contact the reporters on this story: Andrew Noel in London at anoel@bloomberg.net; Patrick Winters in Zurich at pwinters3@bloomberg.net

To contact the editors responsible for this story: Simon Thiel at sthiel1@bloomberg.net Kim McLaughlin, Thomas Mulier

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