Eurocement backing strengthens Holcim/Lafarge deal

The second-largest shareholder in Holcim has given its support to the Swiss cement company's takeover of France's Lafarge, removing one of the last obstacles to a €41bn deal to create the world's largest cement company by revenues.

Eurocement, the cement company owned by Russian Filaret Galchev, with 11 per cent of the shares, said on Wednesday night that it "realises deeply the situation in the construction materials industry as well as Holcim's position in the global market".

"Having analysed all advantages and disadvantages of a possible creation of the biggest global construction materials player we think that the prospective of the development of the combined company is very positive, so we will support the merger," the company said in a press statement.

Mr Galchev has given little public comment on the Lafarge Holcim deal, although this month he suggested he would offer his support in return for a seat on the board of the combined company. It was not immediately clear on Wednesday whether a seat had been offered.

First announced in April 2014, the deal between Holcim and Lafarge came near to collapse earlier this spring, amid public wrangling between the two companies. The outcome was a renegotiation of the price in favour of Holcim, as well as the removal of Lafarge's chairman and chief executive, Bruno Lafont, as the chief executive of the merged entity.

Roles at the merged LafargeHolcim have been carefully divided, with seven members of each company on the board of the new entity.

While wrangling between the two companies' management came near to disrupting the deal, there has also been disagreement among shareholders. Thomas Schmidheiny, Holcim's former chairman and a current board member, whose grandfather founded the company and whose family still owns a fifth of the shares, is understood to have been unhappy at Mr Galchev's stake-building in the Swiss company.

Eurocement said on Wednesday: "We intend to keep on taking an active participation in the work of LafargeHolcim too, for the interests of the combined company and all its shareholders. We consider our participation to make a positive contribution to the development of the combined company."

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