EU Approves Lafarge-Holcim Merger To Form Cement Titan

EU Approves Lafarge-Holcim Merger To Form Cement Titan

EU anti-trust regulators on Monday cleared the merger of French big Lafarge with Swiss rival Holcim to form the world's biggest cement group after both sold parts of their enterprise to fulfill competitors concerns.

"Acquisition of Lafarge by Holcim is topic to conditions. The merger can proceed," EU Competition Commissioner Margrethe Vestager said on Twitter, adding the move was "good for development".

The European Commission said it allowed the merger to go ahead on condition that Lafarge divest companies in Germany, Romania and Britain and that Holcim do the identical in France, Hungary, Slovakia, Spain and the Czech Republic.

Holcim and Lafarge introduced in April they have been merging to create the world's biggest cement group worth forty billion euros ($55 billion), with an eye on booming building in rising markets.

The deal, a serious event in the global construction industry, is predicated on the supply of one Holcim share for one Lafarge share.

The new company shall be called LafargeHolcim and "can have a unique position in 90 international locations and will probably be evenly balanced between growing international locations and countries with sturdy progress," the corporations said in a joint statement.

They highlighted the match of their actions since Lafarge has a robust presence in Africa and Holcim in Latin America.

Nonetheless they each have big and competing interests in Europe.

The European Commission said it had had issues that the "transaction, as initially notified, would have" damage competitors in many markets in Europe however that the two firms later "dedicated to divesting a lot of the operations the place their activities overlap".

"With the cures, we have now ensured that the creation of an elevated international footprint of the group will not come at the expense of competition in the EU," Vestager said in a statement.

"And this is the optimistic instance at present's approval provides to different corporations which will have global ambitions," she said.

The Commission added that the two firms will not be allowed to complete their deal till it has approved the companies who will purchase the assets put up for sale.

- 'Great satisfaction' -

Figures showed that the new giant will make use of 136,000 people, and have annual sales of 32 billion euros and underlying profits of 6.5 billion euros.

The deal would generate economies of scale of 1.four billion euros over three years.

LafargeHolcim will probably be in a powerful position as a supplier of cement, a key basic materials in construction.

Building supply firms have been expanding in emerging international locations the place they see huge opportunities for development as they face sluggish circumstances in the European building industry.

Shares in the new firm will likely be listed on stock exchanges in Paris and Zurich.

"We welcome with nice satisfaction the commission's positive resolution," said Wolfgang Reitzle, the long run chairman of LafargeHolcim, and Bruno Lafont, the long run chief executive officer, in a joint statement.

"Due to this approval, we stay more than ever on the best path to finalise the merger in the first half of 2015."

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