Lafarge’s Lafont favors cement insider as chief exec in Holcim tie-up

Lafarge boss Bruno Lafont wants someone with experience of the cement industry to be chief executive in the French group’s planned tie-up with Swiss peer Holcim daily newspaper Le Monde said.

The choice of CEO for what would be the world’s largest cement maker is still unresolved after revised merger terms last month gave Lafont the role of non-executive co-chairman instead of chief executive as initially planned.

Lafont is due to propose a CEO candidate within the next two weeks ahead of a special May 8 shareholder meeting called to ratify the merger deal.

“For me, there should be a leader able to drive and unify the teams, a cement expert who already has good knowledge of the industry and the company, and with a true culture of value creation for shareholders,” he told Le Monde in an interview published on Saturday.

Lafarge’s largest shareholder, meanwhile, stressed in a separate interview the need for the CEO to have broad experience in order to nurture a new culture in the merged group.

“So it should be someone with different experience and with an international profile,” Gerard Lamarche, joint managing director of Groupe Bruxelles Lambert (GBLB.BR) (GBL), told the Financial Times.

The reworked merger proposals gave a more attractive share-swap ratio for Holcim shareholders but left the choice of CEO pending.

The revised terms have failed to satisfy Holcim’s second-biggest shareholder, Russian businessman Filaret
Galchev, and a source at his Eurocement holding firm said this week he wants to reopen the question of the exchange ratio.

Lafont and Lamarche each ruled out changing again the deal terms. “The financial parities are not going to change, nor will the governance,” Lafont said.

The adjusted share-swap ratio, which will see Lafarge shareholders receive nine Holcim shares for every 10 Lafarge ones rather than the one-for-one ratio previously proposed, reflected a shift in market conditions since the deal was first unveiled a year ago but preserved the principle of “merger between equals”, Lafont said.

Holcim Chairman Wolfgang Reitzle has also opposed revising again the financial terms but said this week he was open to Eurocement having a seat on the merged company’s board.

GBL’s Lamarche backed the idea of a Eurocement board seat without further concessions.

“I think there is nothing else to discuss. Eurocement is a shareholder like all the other ones,” he told the FT.

Source

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