Eurocement backs Holcim/Lafarge deal

The second-largest shareholder in Holcim has given its support to the Swiss cement company'stakeover of France's Lafarge, removing one of the last obstacles to a EUR41bn deal to create theworld's largest cement company by revenues.

Eurocement, the cement company owned by Russian Filaret Galchev, with 11 per cent of the shares,said on Wednesday night that it "realises deeply the situation in the construction materials industryas well as Holcim's position in the global market".

"Having analysed all advantages and disadvantages of a possible creation of the biggest globalconstruction materials player we think that the prospective of the development of the combinedcompany is very positive, so we will support the merger," the company said.

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Mr Galchev has made little public comment on the Lafarge Holcim deal, although this month hesuggested he would offer his support in return for a seat on the board of the combined company. Itwas not immediately clear on Wednesday whether a seat had been offered.

First announced in April 2014, the deal between Holcim and Lafarge came near to collapse thisspring, amid public wrangling between the two companies. The outcome was a renegotiation of theprice in favour of Holcim, as well as the removal of Lafarge's chairman and chief executive, BrunoLafont, as the chief executive of the merged entity.

Roles at the merged LafargeHolcim have been carefully divided, with seven members of eachcompany on the board of the new entity.

While the wrangling between the two companies' management came near to disrupting the deal,there has also been disagreement among shareholders. Thomas Schmidheiny, Holcim's formerchairman and a current board member, whose grandfather founded the company and whose familystill owns a fifth of the shares, is understood to have been unhappy at Mr Galchev's stakebuilding inthe Swiss company.

Eurocement said: "We intend to keep on taking an active participation in the work of LafargeHolcimtoo, for the interests of the combined company and all its shareholders. We consider ourparticipation to make a positive contribution to the development of the combined company."

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