Berlin: As part of their proposed merger, two building material majors Lafarge and Holcim will sell assets worth 6.5 billion euros, located in Europe, Canada, Brazil and Philippines, to Irish cement maker CRH.
"Taken together, the assets being disposed under terms of today's announcement generated an estimated 2014 sales of 5.2 billion euros, with an estimated 2014 operating EBITDA of 744 million euros. The enterprise value of 6.5 billion euros reflects the value of these high quality assets," the two firms, to be merged in the first half of current year, said in a release.
It was mandatory for these two firms to shed some assets to comply with the regulatory requirements. Holcim, Lafarge and CRH have presence in India. However, they are unlikely to sell any assets here.
The two firm said divestments are subject to completion of merger, including a successful public exchange offering and approval by Holcim's shareholders in second quarter of 2015.
"The projected transaction is a key step towards creation of LafargeHolcim and the value offered reflects the strong quality of selected assets," said Wolfgang Reitzle, designated Chairman of the Board of Directors of LafargeHolcim and Bruno Lafont, designated CEO of the future combined company.
"With this announcement, we remain firmly on track to complete our proposed merger in the first half of 2015," they added.
The merger would create the most advanced group in the industry, operating in 90 countries, with a combined sales of USD 44 billion.
Divestment process would be carried out in the framework of the relevant social processes and the ongoing dialogue with the employee representatives' bodies. It will be submitted to the relevant Competition authorities and to the shareholders of CRH, it added.
The two have already received nod from the European Commission for the proposed merger.
