Merger of Holcim and Lafarge questionable

Merger of Swiss Holcim and French Lafarge, which would create the biggest cement producer in the world, is questionable after Swiss company set new requirements with respect to transaction.

Merger can "no longer be planned in the existing form", Holcim announced, alluding at the offer of one Holcim share for one share of Lafarge. Swiss group states they want to negotiate again on parity issue as well as managing issues.

In a separate announcement, Lafarge informed they are ready to consider only the option of parity statements but that they do not accept changes of other agreement terms.

Holcim and Lafarge announced the merger last year so that they would profit from expected construction boom at the developing markets.

Transaction would create a giant in cement production which would hire more than 130.000 employees and generate an annual profit of EUR 32 billion and a basic profit of 6,5 billion.

In the meantime, the parity question popped up which became especially importantafter two group informed on significantly different business results in thefourth quarter.

Holcim generated profit increase of 43,5%, to 458 million francs while Lafarge ended the quarter with a loss of EUR 145 m. The value of Holcim was additionally increased by a sudden leap of Swiss franc value.

According to Swiss media, Holcim wants a larger stake.