Saturday, November 22nd6.3°C
24157
24056

Lafarge, Holcim in talks to merge the world's two largest cement companies

The world's two largest cement companies, Lafarge and Holcim, say they are in advanced discussions on a "merger of equals" to create a global powerhouse with $47 billion of annual sales.

"Holcim and Lafarge believe that, given the strong complementarity of their portfolio and the cultural proximity between the two companies, there is rationale in considering a potential merger that could deliver significant benefits to customers, employees and shareholders," the companies said in separate statements Friday.

The news sent their respective shares up about seven and nine per cent in trading in Zurich and Paris.

The Swiss and France-based companies said there is no assurance that the discussions will lead to a definitive agreement.

Together they earned $3.14 billion of profits last year, including $2.5 billion attributable to shareholders, and employed more than 134,000 people around the world, including Canada.

Lafarge is partially owned by a subsidiary of Power Corp. (TSX:POW), whose chairman and co-CEO, Paul Desmarais Jr., is a member of the Lafarge board of directors.

Last year, it earned $1.17 billion on $22.8 billion of sales. Holcim says it earned $1.96 billion on $24 billion of net sales in 2013.

Each is saddled with more than $13 billion of debt that was increased from acquisitions.

They have been cutting costs and reducing debt as they've faced the negative fallout from the global economic slowdown.

But the companies said in annual reports that the longer term prospects are tied to economic recovery and growing urbanization.

"Markets shall increasingly benefit from the recovery in the United States and the continuing growth in emerging markets as Europe overall stabilizes," said Lafarge, which sees cement demand growing by two to five per cent in 2014.

The merger is likely to attract the concerns of competition regulators because of the dominant position the company would have. Lafarge alone says it has a cement market share of 33 per cent in Canada, 12 per cent in the U.S., 40 per cent in the U.K., and 34 per cent in France.

Laforge entered North America in 1956 by building a cement plant in Richmond, B.C. It employs more than 6,000 employees at six plants that have the capacity to produce 5.8 million tonnes of cement annually.

Holcim employs nearly 2,900 workers at four facilities, including two cement plants in Quebec and Mississauga, Ont.

The company said the Canadian operations sold less cement and aggregates last year because of challenging market conditions.

The Canadian Press


Read more Business News

22970


Recent Trending




Today's Market
S&P TSX15111.13+35.95
S&P CDNX789.135.56
DJIA17810.0691.06
Nasdaq4712.97+11.102
S&P 5002063.50+10.75
CDN Dollar0.8901-0.0002
Gold1201.50+10.60
Oil76.72+0.87
Lumber331.50+4.50
Natural Gas4.236-0.253

 
Okanagan Companies
Pacific Safety0.155-0.005
Knighthawk0.01-0.005
QHR Technologies Inc1.30+0.03
Cantex0.04+0.005
Anavex Life Sciences0.178+0.008
Metalex Ventures0.03+0.005
Russel Metals31.62+0.82
Copper Mountain Mining2.24+0.06
Colorado Resources0.125-0.015
ReliaBrand Inc0.013-0.002
Sunrise Resources Ltd0.050.00
Mission Ready Services0.35+0.015

 
24130


22899

FEATURED Property
18773011625 Tower Ranch Boulevard
5 bedrooms 3 baths
$575,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


What I learned in China: Part 2

As per my previous article on my visit to China, we have much to learn about and from their people. It is potentially the largest market on earth with 1.3 billion people in one country but much will d...


Retirement: Health Issues

Our health is really our greatest asset and maintaining our health is of tremendous importance. You want to do what you can to ensure that health issues will not jeopardize the enjoyment of your retir...


Be quiet already!

No, you’re not crazy. There really are voices in your head. Voices that keep you from doing what you need to do during your customer care calls. It can be the voice of your teachers, your parent...

_



24156

24158


Member of BC Press Council


22632