Holcim Ltd.’s second-biggest shareholder, Eurocement Holding AG, plans to vote against the Swiss company’s merger with Lafarge SA, even after the cement makers last week agreed on new terms and management changes to placate investors, said a person familiar with the matter.
Eurocement isn’t satisfied with the revised terms, which would give 0.9 of one Holcim share for one share of Lafarge, instead of the original one-for-one ratio, the person said, asking not to be identified because the considerations are private. The investor is also seeking other improvements, the person said. Representatives for Eurocement couldn’t immediately be reached for comment. Holcim and Lafarge declined to comment.
The initial terms and management lineup became a sticking point after Lafarge’s results lagged its Swiss peer since the merger was announced in April last year. Lafarge chief Bruno Lafont, who had been designated as chief executive officer of the merged company, will now become co-chairman, after Holcim managers said they didn’t want him as CEO.
The continued opposition by Russia’s Eurocement, which holds 10.8 percent of the Swiss cement maker, could derail the merger if other investors follow suit. Two thirds of shareholders need to approve a capital increase that is necessary for the deal to go through at an investor meeting in May.
Earlier this week, Ethos foundation, which advises Swiss pension funds, said that it also still has doubts about the combination of both companies. Funds advised by Ethos may represent about 4 to 5 percent of investors at the meeting. Holcim’s fourth-biggest shareholder, Harris Associates, told newspaper Finanz und Wirtschaft today it hasn’t decided yet whether to support the merger as the new terms are “not perfect.”
Swiss newspaper Handelszeitung reported earlier today that Eurocement is not pleased with the new terms of the planned merger, citing people close to the matter.
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