Sorry M. Lafont, someone else needs that chair.
Photograph by Eric Piermont — AFP/Getty Images
By Geoffrey Smith
March 20, 2015

The €41 billion merger of global building materials giants Holcim SA (HCMLY) and Lafarge SA (LFRGY) is back on track after the two sides agreed to change the deal’s terms in favor of the Swiss-based company.

Holcim said in a statement that the two companies had agreed a new exchange ratio of nine Holcim shares for 10 Lafarge shares. The deal had originally foreseen a one-for-one exchange, but Holcim’s business has performed far better than Lafarge’s since the deal was announced, leading investors to press for better terms. Holcim’s management finally said earlier this week that it couldn’t continue with the merger as originally planned.

In addition, all shareholders will receive a scrip dividend of one new company share for every 20 they own after the closure of the deal, which is now expected in July.

Lafarge has also had to give ground on the divvying up of top positions in the new company. CEO Bruno Lafont, who was due to remain in charge of the merged entity, will instead now become co-chairman alongside Holcim’s Wolfgang Reitzle. Lafarge’s board will propose a new CEO, and the proposal will need the approval of Holcim’s board.

Holcim’s shares hit a new eight-month high on the news, while Lafarge’s rebounded 3.4% in early trading. Lafarge’s shares had fallen sharply on Monday, as it has more to lose if the deal falls apart, analysts say.

Shares in Irish-based CRH Plc (CRH) ] also rose over 4% in early trading, as the news removes the threat to its deal to buy a package of assets that the two companies are disposing for antitrust reasons.

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