Holcim-Lafarge Merger Terms Intact After Franc’s Gain on Euro

Holcim Ltd. Chief Financial Officer Thomas Aebischer said the terms of its merger agreement with French cementmaker Lafarge SA remain intact, even after the Swiss franc’s strengthening.

“We still see it as a good offer,” Chief Financial Officer Thomas Aebischer told Bloomberg News. There’s no mechanism in the terms to change the ratio.

Aebischer’s comments come amid shareholder concerns surrounding the sudden lifting of an exchange rate cap on the franc and how that would alter the 1:1 share exchange ratio agreed on by the world’s top cement makers when they hatched a plan to merge. The franc has strengthened 14 percent since the April 7, 2014 announcement.

Holcim Chief Executive Officer Bernard Fontana declined to comment on the potential for changing the ratio when asked by reporters whether discussions with Holcim investors were being held.

Lafarge and Holcim, which announced their merger in April, agreed this month to sell 6.5 billion euros ($7.38 billion) of assets to CRH Plc to win antitrust approval and complete the combination by mid-2015. Lafarge CEO Bruno Lafont, who’s due to be run the combined company, said on Feb. 18 that some proceeds from the merger may be used to reward shareholders.

Pending Approvals

Five authorities in the U.S., Canada, India, Mauritius and Ecuador have yet to give their consent for the merger, though some of those approvals are expected to be received in March, Fontana said.

Holcim sees 2015 operating profit excluding merger costs in a range of 2.7 billion francs to 2.9 billion francs as the Swiss manufacturer reduces spending and cement markets rebound. Profit was 2.47 billion francs last year.

Fourth-quarter earnings beat analyst predictions and the company said cement volumes will accelerate outside of Europe. Holcim plans to pay a dividend of 1.3 francs, compared with a 1.4-franc payout estimated in a survey by Bloomberg.

Before it's here, it's on the Bloomberg Terminal.