Swiss firm rejects existing merger agreement and proposes renegotiation of terms with French rival
SWISS-based Holcim have today formally rejected the terms of the proposed €42 billion merger with French cement rivals Lafarge. The announcement follows mounting speculation over the likelihood of a renegotiation of terms after Holcim shareholders pointed to the divergence in the value of the two companies during the past 12 months.
Some Holcim shareholders have raised concerns that the proposed one-for-one share exchange deal is no longer in their in their long-term interest following a period of strong performance by the Swiss firm, and have urged the company to push for better terms from the deal.
In a statement issued this morning, Holcim’s board of directors said it had concluded that the merger agreement could no longer be pursued in its present form, and had proposed to enter into negotiations in good faith around the exchange ratio and governance issues.
Lafarge confirmed that they had received a letter yesterday (15 March) from the chairman of Holcim’s board of directors saying the company did not want to pursue the execution of the merger agreement approved last July and would be challenging the financial terms and governance structure of the proposed merger of equals.
In response, Lafarge’s board of directors said it remained committed to the merger project and was willing to explore the possibility of a revision of the parity, in line with recent market conditions, but would not accept any other modification of the terms of the existing agreements.