Holcim and Lafarge name post-merger board candidates

Tue Apr 14, 2015 7:42am EDT
 
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By Joshua Franklin

ZURICH (Reuters) - Holcim HOLN.VX and Lafarge LAFP.PA outlined an even split of seats on the two cement groups' post-merger board, but there was no place for Holcim investor Filaret Galchev, who has yet to announce his support for the proposed $40 billion deal.

The inclusion of Galchev or one of his associates could have been a sign that Holcim's second-largest shareholder -- with a 10.8 percent stake via Eurocement Holding -- will back the merger with France's Lafarge at next month's shareholder vote.

Swiss group Holcim needs the backing of two thirds of its shareholders at the meeting on May 8 to approve a capital increase to fund the deal.

"Eurocement's chairman, Filaret Galchev, is not part of the foreseen board, which would have reduced the risk of his voting against the merger," Vontobel analyst Christian Arnold wrote in a note. Arnold has a "buy" rating on Holcim's stock.

Eurocement did not respond immediately to a request for comment.

Holcim's chairman said last month that the company was open to giving Galchev a seat on the combined board but his name was not on Tuesday's list of candidates.

A Eurocement source told Reuters at the time that a seat on the board would be of interest but that Galchev is still seeking further improvement to the deal's exchange ratio of nine Holcim shares for 10 Lafarge shares.

The designated board of directors will consist of 14 members to be elected at Holcim's extraordinary general meeting on May 8. Each company will receive seven seats, with Holcim Chairman Wolfgang Reitzle and Lafarge Chief Executive Bruno Lafont proposed as co-chairmen of the merged company.   Continued...

 
Current CEO of Lafarge Bruno Lafont (L), Wolfgang Reitzle, who will be chairman of the new merged entity LafargeHolcim, and upcoming CEO Eric Olsen (R) pose for the media after a news conference in Zurich April 9, 2015.  REUTERS/Arnd Wiegmann