Boost for CRH as Holcim and Lafarge appoint CEO
CRH's deal to buy €6.5bn from building materials rivals Holcim and Lafarge looks to be a step closer as the two firms have announced the appointment of a chief executive of their combined company.
Lafarge insider Eric Olsen, the firm's executive vice-president for operations, will take on the challenge of knitting together the two companies in a $40bn merger if it is approved by shareholders.
The post was a key sticking point as the French and Swiss cement-makers sought to save their merger in March after the Swiss side sought to renegotiate the terms and remove the current chief executive of Lafarge, Bruno Lafont, from the helm of the combined entity.
Paris-headquartered Lafarge and Zurich-based Holcim announced their intention to merge last year. In order to secure approval from competition watchdogs, they have agreed to offload assets around the world.
CRH, Ireland's biggest company, emerged as the successful bidder for €6.5bn of those assets earlier this year.
The announcement now brings the sale, which is conditional on the merger going ahead, one step closer. Shareholders of Holcim still need to ratify the merger at a vote in early May. David Holohan, the head of research at Merrion Capital, said the announcement was "positive for CRH, particularly as Mr Olsen has experience at integrating acquisitions".
However, he he still had his doubts as to the value of the deal and whether the merger will be voted through by Holcim shareholders.
"I'm still not a fan of the deal and I think that CRH are overpaying for the assets," Mr Holohan said. "There are a lot of Holcim shareholders as well who aren't overly enthused with the motion [for the merger] and I'd say I'd be on the fence about whether it will go through or not."