Cement giants Lafarge and Holcim negotiate mega-merger

Logos for Lafarge and Holcim

Related Stories

The world's two largest cement makers are in advanced talks to merge into a company that would have a stock market value of more than $30bn euros (£25bn).

A deal between France's Lafarge and the Swiss Holcim group would be the industry's biggest ever merger.

However, the proposed tie-up could face a lengthy competition inquiry from regulators as the new company would be dominant in Europe and the US.

Shares in Lafarge and Holcim jumped 9% and 7% respectively on the news.

In statements on Friday, the companies emphasised that no agreement had yet been reached, and that there was no guarantee of a deal.

But they pointed to a "strong complementarity" and "cultural proximity" between their operations.

A merger would allow the companies to cut costs, trim debt and reduce the sector's global overcapacity.

"I think this will be a story that develops over a year or more," Morningstar analyst Elizabeth Collins told Reuters.

She added that competition regulators would probably require the companies to shed cement plants and distribution facilities before approving any merger.

Although the firms have overlapping operations in Europe, Lafarge is strong in Africa and the Middle East, whereas Holcim is almost absent.

Meanwhile, Holcim is strong in Latin America, where Lafarge is not established.

More on This Story

Related Stories

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

Features

  • SyedTanks instead of toys

    Lyse Doucet on the plight of children in Syria and Gaza


  • Silhouette of manSuper-shy

    Why do Germany's super-rich so often keep their heads down?


  • Children playing in Seoul fountainDay in pictures

    The best news photos from around the world in the past 24 hours


  • Gin drinkerMother's ruin

    The time when gin was full of sulphuric acid and turpentine


From BBC Capital

Programmes

  • The smartphones of shoppers being tracked in a storeClick Watch

    How free wi-fi can enable businesses to track our movements and learn more about us

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.