THE world’s two largest cement makers have agreed the terms of a merger that would create a company with a stock market value of around £33 billion.
The boards of France’s Lafarge and Switzerland’s Holcim are said to have approved the proposal and are due to announce it today.
Sources say they have already begun to address possible competition concerns that would arise from the tie-up.
The two companies had already issued statements on Friday announcing they were in advanced talks to merge, a deal which would help them slash costs, trim debt and better cope with the soaring energy prices and weaker demand that have hurt the sector since the 2008 economic crisis.
The expected terms of the transaction would see Holcim launch a public takeover for Lafarge payable in shares. If successful, the combined entity will be based in Switzerland but will have operational headquarters in Switzerland and France.
Lafarge chief executive Bruno Lafont will be chiefexecutive of the combined entity while the chairman will be Swiss.
But any deal is likely to draw scrutiny from European competition watchdogs, as a Lafarge-Holcim entity would have a dominant position in both Europe and the United States.
Lafarge faced competition concerns two years ago when it merged its UK cement and aggregates business, including its Dunbar cement plant, with similar operations of Tarmac.
The joint venture was forced to sell some of its assets, and further divestments insisted upon by the Competition Commission have forced it to postpone a flotation.