Post-Merger Integration Challenges in Lafarge-Holcim Merger

Pacific Business Review International, Vol.11, No.9, 2019, pp.62-76

15 Pages Posted: 24 Apr 2020

See all articles by Surbhi

Surbhi

DAV University

Sandeep Vij

DAV University, Jalandhar

Date Written: March 15, 2019

Abstract

Holcim and Lafarge merged on 7th April 2014, to form a cement giant which dominated the cement industry worldwide with its presence in 90 countries owning 168 plants and having 386 million tons per annum of cement producing capacity. The deal was struck by swapping 9 Holcim shares for 10 Lafarge shares. The aim of the merged entity was to be on top in the global cement industry which they did achieve by this merger. The merger made it easy for the company to get the finances, reduced their CAPEX, improved their credit rating and got the company synergies worth millions and billions. However, the deal drew the regulatory scrutiny of competition watchdogs in about fifteen different countries; and were asked to divest from many of their plants in different nations so as to convince the regulators that their combined market concentration will not reduce the competition. Their reduced post-merger profits further created challenges for the company to stay in the top position that they gained after the merger. A series of delays and regulatory challenges that LafargeHolcim group had to face during the implementation of the merger deal were strategically used by the merged entity to become a leading cement company in the global market. Will they be able to come out of the chaos they were in after this merger and be able to maintain the top position?

Keywords: Cement Industry, Mergers and Acquisitions, Divestment, Non-Market Strategy, Legal Challenges.

JEL Classification: M1

Suggested Citation

Surbhi and Vij, Sandeep, Post-Merger Integration Challenges in Lafarge-Holcim Merger (March 15, 2019). Pacific Business Review International, Vol.11, No.9, 2019, pp.62-76, Available at SSRN: https://ssrn.com/abstract=3554701

Surbhi

DAV University ( email )

Village Sarmastpur
Pathankot National Highway (NH 44)
JALANDHAR, Punjab 144025
India

Sandeep Vij (Contact Author)

DAV University, Jalandhar ( email )

Jalandhar-Pathankot National Highway
NH44
JALANDHAR, Punjab 144012
India
919876045957 (Phone)

HOME PAGE: http://www.davuniversity.org

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