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Building material suppliers streamline assets ahead of merger

As previously reported by Quarry, the two companies agreed in April to merge into a single entity – LafargeHolcim – in order to reduce costs and better handle high energy prices, tough competition and weakened demand.

It has been said that the merger would likely create the world’s largest construction materials company, which could arguably result in significant market competition reduction in some countries in which both companies operate. In anticipation of potential competition authorities’ requirements, as well as to streamline their combined operations, the companies have released a list of assets that they propose to divest.

For Holcim, these include assets in Serbia, Canada and the Mauritius, its operating assets in Hungary, and its assets in metropolitan France, with the exception of its Altkirch cement plant and aggregates and readymix sites in the Haut-Rhin market.

For Lafarge, assets proposed for divestment include those in Germany and Romania, its Mannersdorf cement plant in Austria, its assets on Reunion Island in France, with the exception of its shareholding in Ciments de Bourbon, and its Lafarge Tarmac assets in the UK, with the possible exception of one cement plant.

“The future LafargeHolcim group will have a significant and balanced industrial base in Europe – around 20 per cent of its revenues – within its overall global footprint, enabling it to take advantage of the European economic recovery,” the two companies explained in a joint press statement.

“[In the Philippines,] the associated companies of Lafarge and Holcim – Lafarge Republic (LRI) and Holcim Philippines – are exploring the combination of their businesses other than LRI’s Bulacan, Norzagaray, and Iligan plants, which are considered to be divested as part of such combination.

“[In Brazil,] Holcim and Lafarge will file soon with the Brazilian regulator CADE and propose a comprehensive and high quality package of divestments.

“Both companies will continue to consider whether divestments would be necessary where there might be overlaps or depending on regulatory requirements.”

The merger is expected to close in the first half of 2015 and is expected to operate across 90 countries to “create the most balanced and diversified portfolio in the [construction materials] industry”.

Source: Lafarge

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