EU clears key hurdle to giant Lafarge, Holcim merger
The EU on Friday removed a key hurdle to the merger between French cement giant Lafarge and Swiss rival Holcim, approving the sale of assets demanded for the deal to go through.
Lafarge and Holcim agreed to their 40 billion euro tie-up to form the world's biggest cement company last year, but EU regulators said they would have to sell assets worth 6.5 billion euros to ease fears the new firm would hurt competition.
The European Commission said it had now approved the sale of those assets to Irish building materials group CRH, finding that it posed no separate competition risk.
"CRH's activities overlap with the divested businesses in a number of areas, such as cement, aggregates, ready-mix concrete and asphalt," the Commission said in a statement.
However, it added that because these materials are sold close to where they are manufactured, in local markets, CRH would not gain an unfair advantage and would still face competition.
The Commission cleared the merger in December but required Lafarge to sell businesses in Germany, Romania and Britain, while Holcim had to do the same in France, Hungary, Slovakia, Spain and the Czech Republic.
Regulators in other countries such as the US and Brazil also demanded that the two companies sell assets to address their competition concerns.
The new company will be called LafargeHolcim, employing some 136,000 people with annual sales of 32 billion euros and underlying profits of 6.5 billion euros.
The merger still has to be approved by shareholders.
Analysts say they expect the deal to go through, but there has been considerable opposition to the terms which had to be renegotiated in March.
There were also sharp differences over who should lead the new company, with the two boards only agreeing earlier this month that Lafarge operations vice president Eric Olsen would be its chief executive officer.
© 2015 AFP