Regulatory mountain for merger to climb

Regulatory mountain for merger to climb

The plan to merge Switzerland’s Holcim with France’s Lafarge to create the world’s largest cement producer – an operation with a turnover of €32bn (US$44bn) – looks an uncertain prospect given the raft of regulatory hurdles that the deal will need to overcome.

While the two companies claim the proposal will deliver expected annual savings of €1.4bn in creating a business with less risk and higher growth, it remains to be seen what impact the remedies required by various anti-trust authorities will have on that figure. Analysts at UBS point out that the proposed merger is likely to face regulatory scrutiny in several core markets – including France, the UK, the US, Canada, and Brazil – and suggest that the approval process could consequently take up to two years.