Lafarge and Holcim will need between 12 and 18 months to complete the integration of the two cement groups following the closure of their merger deal, the future head of the combined company Eric Olsen said on Thursday.
Lafarge chief executive Bruno Lafont added that the companies still expected to finalise the transaction in July, likely on July 15.
Lafarge and Holcim have picked Lafarge insider Eric Olsen as chief executive of their proposed combined company if shareholders back it next month.
Olsen, a 16-year veteran at Paris-based Lafarge, will take on the challenge of knitting together the two companies to deliver a promised $1.50 billion in cost savings.
He said he was ready for the task of extracting these benefits from the merger and of forging a coherent new company from the Swiss and French groups.
“I see my role not only as the operational leader but also as the integrator of cultures,” he said at a press conference on Thursday.
The chief executive role was a major sticking point when the tie-up between the French and Swiss companies came close to collapse in March. The two groups eventually agreed new terms aimed at satisfying discontented Holcim shareholders, but the top job remained a problem.
Holcim chairman Wolfgang Reitzle said on Thursday the Swiss cement maker is confident of winning sufficient backing from shareholders to push through its planned merger with France’s Lafarge, Reuters reports.
Reitzle told a news conference the firm needed to do more over the coming weeks to convince shareholders of the merger’s advantages ahead of an extraordinary shareholder meeting next month.
Holcim needs to convince two thirds of its shareholders to approve a capital increase to fund the deal at the May 8 meeting.
Holcim’s second-biggest shareholder Russia’s Eurocement and third-biggest Harris Associates has expressed misgivings about the deal, and has yet to speak publicly on Olsen’s appointment.
Shares in Holcim rose 3.6 percent and Lafarge 4.7 percent at 13:12 GMT in response to Olsen’s appointment.
Since the deal was announced last April, Holcim investors had watched the companies’ relative business performances diverge. A stronger Swiss franc also became a factor, along with questions over the management style and record of Bruno Lafont, Lafarge CEO, who was to be CEO of the merged company.
The two groups have agreed that Lafont will become co-chairman with Holcim’s Wolfgang Reitzle instead of chief executive as initially planned.
Olsen was backed by the boards of both companies as chief executiveafter Holcim’s board met on Wednesday.
An American and French citizen, Olsen, 51, joined Lafarge in 1999 and now works as its executive vice-president for operations, responsible for countries including France, the United States, Brazil and Egypt.
Jefferies analyst Mike Betts predicted that Olsen would be well regarded once investors got to know him, citing his track record at Lafarge North America.
“He was a strong operator, presenter and team player, who well understood the needs of the financial markets,” Betts wrote in a note.
Holcim chairman Reitzle remained confident about next month’s shareholder vote on the deal on May 8 but said the company needed to do more to convince shareholders of the merger’s advantages beforehand.
“We’re confident that we will win sufficient votes for the deal,” Reitzle said.
Holcim’s largest shareholder Thomas Schmidheiny is happy with the appointment of Olsen as the future head of the two cement companies once their merger is completed, his spokesman said on Thursday.
“Thomas Schmidheiny views Eric Olsen as a very good appointment,” Schmidheiny’s spokesman said.
Shareholders of Swiss Holcim still need to ratify the merger with France’s Lafarge at a vote in early May.