Holcim rejects Lafarge merger offer, demands better terms

The board of Swiss aggregates giant Holcim has rejected the terms of a €42bn merger with French cement group Lafarge.

Holcim has said to Lafarge that it no longer likes the terms of the deal approved last July and is “challenging the financial terms and governance structure of the proposed merger of equals".

It said it now disagreed with the share exchange ratio and "governance issues".

Lafarge said it “remains committed” with its rival and is "willing to explore the possibility of a revision of the parity”.

Reports suggested that recent company results, movements in share prices and foreign exchange fluctuations were behind the change of stance by Holcim.

A source cited by Bloomberg suggested that Holcim is looking to change the proposed 1:1 share exchange ratio to 0.875 Holcim shares for each Lafarge share.

The latest twist may spell bad news for Irish building materials group CRH, listed in London, which was set to snap up €6.5bn of assets from Holcim and Lafarge subject to the completion of the merger.