Two large cement producers, Lafarge and Holcim, both present in Romania, will merge, creating a company with a sales level of EUR 32 billion.

The merger, achieved by Holcim buying Lafarge, will create the LafargeHolcim brand, with an estimated joint EBITDA profit of EUR 6.5 billion.

The two companies are expected to sell some of their assets in Europe, in order to get the needed approval for the merger. Lafarge has 40 industrial sites across Romania and 1,000 employees and collaborators. It runs two cement factories at Medgidia and Hoghiz, and a grinding unit at Targu Jiu.

Holcim owns two cement plants in Campulung and Alesd, a grinding station and a cement terminal in Turda, 13 ecological ready-mix plants, 3 aggregates plants, 2 special binders plants and a cement terminal in Bucharest, and employs around 950 people.

The two companies announced their proposed merger om Monday, April 7, and expect the merger to be finalized in the first half of 2015, subject to obtaining regulatory approvals. The new entity's board would be chaired by Wolfgang Reitzle as Chairman and Bruno Lafont, current chairman and CEO of Lafarge, as CEO and member of the board.

The transaction would be structured as a public exchange offer initiated by Holcim with an exchange ratio of 1 Holcim share for 1 Lafarge share.

"Combined operations would include production sites located in 90 countries across all continents with the most balanced and diversified portfolio in the industry. This will deliver highly attractive growth prospects across both high growth and developed markets. No country would account for more than c.10 percent of combined revenues,” according to the two companies' statement.

LafargeHolcim would be listed on the SIX in Zurich and Euronext Paris and it would continue to be headquartered in Switzerland.

The full statement is here (in English, pdf).

More about the merger, here (in English, pdf file).

editor@romania-insider.com