Construction Coupling

Cementing the Deal

So where does the merger leave me?
  • Why it matters

    Why it matters

    If Lafarge and Holcim manage to execute their merger properly, they will dominate the global cement market.

  • Facts


    • French firm Lafarge and Swiss-based Holcim cleared final regulatory hurdles to their merger this week.
    • They have combined sales of €32 billion ($39.3 billion).
    • They plan to increase sales by €1.4 billion, but job losses are likely.
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Two sturdily built men wearing white overalls and safety goggles stand in front of a cement mixer. One of them empties the contents of a bag of cement into the mixer, and then throws the bag in afterwards. The other starts up the mixer. After a couple of minutes, the sack disintegrates and mixes with the gray mass of building material. This entire manouvre is full of technical innovation.

Water-soluble cement bags are just one example of how the Paris-based building materials giant Lafarge plans to rise above the competition. The company runs runs its own research center near Lyons, France, developing the construction material solutions of tomorrow.

“Each year we spend €120 million ($187.3 million) on research and development,” Lafarge’s Chairman and Chief Executive Officer Bruno Lafont says.

But Mr. Lafont has more than innovation on his mind. For weeks he has been traveling from country to country to convince market analysts and journalists that the merger of Lafarge with Swiss rival Holcim makes good business sense.

The corporate marriage cleared a major regulatory hurdle this week when the European Commission gave its approval. But complete integration remains a long way off as important details of the merger remain unclear. In fact, the president of the new company, Wolfgang Reitzle, the former head of the German gas and engineering company Linde Group, faces an array of challenges.

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