Failed Holcim-Lafarge merger would be credit-positive for CRH, says Fitch

Shares in CRH have taken a hit this week on fears that the Holcim-Lafarge merger may fall apart, given that the group's proposed acquisition of €6.5bn of assets from the two European cement giants is contingent on the completion of their tie-up.

Shares were 2.7% lower at 1,685p by 15:49 and have now plunged 7% since Holcim rejected the terms of the deal on Monday.

The merger could still go ahead, with Lafarge saying it was "willing to explore the possibility of a revision" of the share-exchange ratio that Holcim was unhappy with.

However, according to ratings agency Fitch, CRH may actually be better off and its financial profile would improve if the deal breaks down.

"The Rating Watch Negative on CRH's 'BBB' rating would probably be resolved if the deal collapsed, as it reflects uncertainty about CRH's ability to ease the debt burden that would stem from the deal," Fitch said.

CRH had said last month that the proposed acquisition would be funded by €2bn in cash from the balance sheet, new debt and a 9.99% equity placing.

The company's net debt position at the end of 2014 was expected to be around €2.5bn, down from €3bn the year before.