Holcim Ltd. and Lafarge SA agreed to nominate Eric Olsen to lead their combined operation as they seek to overcome lingering opposition from some shareholders to their planned merger, said a person familiar with the matter.
The boards of both cement companies today approved the appointment of Olsen, who is Lafarge’s executive vice president of operations, as chief executive officer, said the person, who asked not to be named because the decision isn’t public yet. The companies are set to announce the appointment as early as Thursday, the person said.
The companies needed to find a CEO candidate after Holcim demanded changes to an initial agreement that would have had installed Lafarge chief Bruno Lafont as head of the new entity. Holcim questioned the ability of the French executive to reach savings targets after Lafarge’s results trailed those of its Swiss merger partner.
Olsen, who has both French and U.S. nationality, joined Lafarge in 1999. The executive, who started his career at consulting firm Deloitte & Touche, holds a degree in finance and accounting from the University of Colorado and an MBA from the HEC business school in Paris.
Olsen was one of two candidates to lead the new entity, with Lafarge Chief Financial Officer Jean-Jacques Gauthier being the other contender, two people with knowledge of the matter said last month.
Representatives for both Holcim and Lafarge declined to comment on the CEO appointment. The Financial Times reported the decision to appoint Olsen earlier Wednesday.
The companies agreed on March 20 to make Lafont co-chairman of LafargeHolcim along with Holcim Chairman Wolfgang Reitzle and give the Swiss company a bigger stake in the new $48 billion entity, leaving open the contentious question of who would be CEO.
The deal still faces opposition from some shareholders including Eurocement, the Russian cement maker controlled by billionaire Filaret Galchev and Holcim’s second-biggest investor with a 10.8 percent stake. Other investors such as Thomas Schmidheiny, Holcim’s largest shareholder and the billionaire co-architect of the merger, support the tie-up.
Ethos foundation, which advises Swiss pension funds, has said that it still had doubts about the combination, and large shareholder Harris Associates told newspaper Finanz und Wirtschaft that the new terms are “not perfect.”
Two thirds of Holcim’s shareholders need to approve a capital increase that is necessary for the deal to go through at an investor meeting. Lafarge’s annual general meeting is on May 7, one day before the Swiss company meets.
Holcim and Lafarge have predicted the merger will lead to cost savings of 1.4 billion euros ($1.5 billion) annually, giving them an advantage over rivals after a global recession eroded demand for building materials and forced some kilns to run at a loss.