Lafarge strikes merger deal

Visitors in Land Rovers watch as the 14-year quarrying operation by Lafarge Aggregates continues at Whitlingham.
Photo: Bill Smith
Copy: Rowan Entwistle Visitors in Land Rovers watch as the 14-year quarrying operation by Lafarge Aggregates continues at Whitlingham. Photo: Bill Smith Copy: Rowan Entwistle

Monday, April 7, 2014
12:16 PM

Cement makers Lafarge and Holcim have announced plans to merge in a deal creating a business with combined sales of around £26 billion.

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LafargeHolcim is set to be the world's leading player in cement, concrete and aggregates once the tie-up is completed in the first half of next year.

Lafarge holds a significant shareholding in Lafarge Tarmac, which trumped May Gurney to the 10-year Norfolk County Council road maintenance deal worth £480m, which starts this month.

France's Lafarge, which entered the UK market in 1987 before acquiring Redland in 1997 and Blue Circle in 2001, recently merged its UK operations with those of Anglo American to create LafargeTarmac, a business employing 5,500 staff at 300 sites. Holcim owns Aggregate Industries in the UK.

With the deal set to receive close scrutiny from regulators, the companies plan to offload assets generating between 10% and 15% of their global earnings. No country will account for more than 10% of combined revenues.

The tie-up has been presented as a merger of equals, with the new board featuring equal numbers of Lafarge and Holcim directors.

France's Lafarge employs 64,000 people and generated sales of 15.2 billion euros (£12.6 billion) in 2013, while Zurich-based Holcim achieved sales of 19.7 billion Swiss francs (£13.3 billion).

A two-year investigation by the Competition Commission recently found that the way the UK cement market is set up aids coordination between its three major players, including LafargeTarmac.

The company was told to sell a plant in Derbyshire or Staffordshire and offload accompanying ready-mix concrete plants in order to facilitate the creation of the new producer in the UK.

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