Cement giants plan to merge

Switzerland’s cement manufacturer Holcim has arranged to buy Lafarge of France. The merger of these two giants will create the world’s largest construction materials company. Last year the two companies posted combined sales of more than $40 billion for cement and its related products.

Under the arrangement, the combined organization will be based in Switzerland and listed on the Paris and Zurich stock exchanges.

The companies hope to close the deal early in 2015. However, they have to persuade regulators in 15 jurisdictions that the merger will not hinder competition. They face reviews in France, Spain and Germany, and possibly in the U.S. and countries like Russia.

The Whitehorn Group issued a press release about the merger. It cited Christopher Johnson, a leading branding expert in New York: “This acquisition, which is really more of a merger, raises interesting issues regarding both of these high value brands. Each are the leaders in their markets, with little geographic overlap. … Because this is a merger of equals who are in the same business, one advantage will be through cutting costs. Another will be realized potentially through developing the value of the newly merged brand throughout the world.”

The release also notes that the demand for cement has shifted to emerging markets. China and India make up 90% of worldwide demand for cement.

Click here to see the Whitehorn release of April 10.

Click here to read a report in The Globe & Mail.

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