The world’s largest two cement makers are merging, but must sell assets to avoid competition rules
Holcim of Switzerland and Lafarge of France have announced a partnership ‘of equals’, creating a company with combined sales of €32bn. Both companies have suffered chronic overcapacity since the start of the construction downturn and the merger will enable them to cut costs significantly, since they create such similar products, including cement, stone, gravel and sand, with operations in the same territories.
However, competition authorities in many parts of the world will not approve the deal without major reorganisation and asset disposal. A recent investigation by Britain’s Competition Commission suggested that collusion between these companies could be inflating prices and seriously adding to the country’s housing shortage and price inflation.
Bosses of the companies both said that the merger would make life better for property developers. Holcim chairman Rolf Soiron claimed: “This proposed merger is a once in a lifetime opportunity to deliver substantially better value to customers with more innovation, a wider range of products and solutions and more sustainability and enhanced returns to shareholders. LafargeHolcim will be uniquely positioned to take advantage of growth in developed markets and the world’s fastest growing economies by …read more