Merger of Equals

Merger of Equals

With the merger, Lafarge-Holcim would be the most advanced group in the building materials industry, and will be uniquely positioned in 90 countries around the world with a balanced exposure to both developed and high growth markets.

Holcim (a leading supplier of cement and concrete) and Lafarge (a leader in building materials) have announced their intentions to combine the two companies through a merger of equals. Their merger was unanimously approved by their respective Board of Directors. With the merger, LafargeHolcim would be the most advanced group in the building materials industry, and will be uniquely positioned in 90 countries around the world with a balanced exposure to both-developed and high-growth-markets. The combined entity´s unprecedented range of products and services will cater to the changing demands of the building materials industry and the challenges of increasing urbanisation. The proposed combination would be structured as a public offer filed by Holcim for all outstanding shares of Lafarge on the basis of one-for-one exchange ratio with an agreement to have equal dividends on a per share basis between announcement and completion. Each Lafarge shareholder tendering Lafarge shares to the contemplated exchange offer would receive an equal number of newly issued ordinary shares of Holcim.

Rolf Soiron, Chairman, Holcim, said, ´This proposed merger is a once in a lifetime opportunity to deliver substantially better value to customers with more innovation, a wider range of products and solutions, and more sustainability and enhanced returns to shareholders.´ He added, ´LafargeHolcim will be uniquely positioned to take advantage of growth in developed markets and the world´s fastest growing economies by supplying materials that will enable the construction industry to meet the challenges of the future. Both companies put customers and staff development first to ensure that the new group can deliver best-in-class operational excellence.´

Speaking about the merger, Bruno Lafont, Chairman and CEO, Lafarge, said, ´By combining Holcim´s experienced teams, complementary geographies and innovative expertise with ours, we propose to set up the most advanced group in the construction industry, for the benefit of our clients, our employees and our shareholders. I am confident that this merger of equals provide an unique opportunity to rapidly create the most advanced platform in our industry with outstanding synergies. With a best-in-class international portfolio, robust balance sheet and strong governance, the new group will offer higher growth and low risk, thus creating more value. For years, I have had the utmost respect for Holcim.

The merger will allow the group-with strong roots in Europe-to enter into a new dimension in our ambition to contribute to building better cities on a global scale and in a sustainable manner.´ This new global company would deliver compelling benefits for all stakeholders. LafargeHolcim would be in the best position to address the challenges of urbanisation, including affordable housing, urban sprawl and transport.

The new group would increase its offering to customers through innovation, delivered on an expanded scale, best-in-class R&D, and a combined portfolio of solutions and products. Both companies have pioneered sustainability and climate change mitigation in the industry and are committed to take it to the next level.

LafargeHolcim would have an enhanced presence in the global building materials sector with a No. 1 position globally across cement, concrete and aggregates and new opportunities to optimise production and commercial networks. Lafarge and Holcim proformance combined sales amounting to c. CHF 39bn / EUR 32bn and Ebitda to c. CHF 8bn / EUR 6.5bn. The closing of the merger is expected in H1 2015.

Speaking about the impact of this merger on the cement market, Ashutosh Rampal, VP-Marketing, KJS Cement, said, ´This merger will give the two companies operational impact. It will be more of a merger of balance sheets and will not have any significant impact on the market.´

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