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Lafarge 

“Market Cap $23.06 B As of May 2014

At a Glance
  • Industry: Construction Materials
  • Founded: 1884
  • Country: France
  • CEO: Bruno Lafont
  • Website: www.lafarge.fr
  • Employees: 63,687
  • Sales: $20.18 B
  • Headquarters: Paris
Forbes Lists

#381 Global 2000

  • #466 in Sales
  • #763 in Profit
  • #464 in Assets
  • #479 in Market value
Profile

Lafarge SA engages in the production and marketing of building materials. It produces and sells cement, aggregates and ready-mix concrete. The company’s building products and solutions are used to construct and renovate homes, buildings and infrastructures. It provides its services under the brand name Lafarge. The company operates through the following divisions: Cement, and Aggregates and Concrete. The Cement division produces and sells a wide range of cement and hydraulic binders adapted to the needs of the construction industry. It also offers specialty cements suitable for use in a variety of environmental conditions and specific applications, natural lime hydraulic binders, masonry cements, and ground blast furnace slag. The Aggregates and Concrete division produces and sells aggregates, ready mix concrete, and products relating to paving activities. It also offer plaster based products which include plaster plate, plaster squares, coatings, metal framework and industrial plaster. Lafarge was founded by Joseph-Auguste Pavin de Lafarge in 1833 and is headquartered in Paris, France.

“Lafarge History

Lafarge was founded in 1833 by Joseph-Auguste Pavin de Lafarge in Le Teil (Ardèche), to exploit the limestone quarry in Mont Saint-Victor between Le Teil and Viviers. The limestone is white and argillaceous, and yielded an eminently hydraulic lime.

In 1864 Lafarge signed its first international contract for the delivery of 110,000 tonnes of lime to the Suez Canal construction project. In 1980 Lafarge joined with the Belgian coal, coke and fertilizer company Coppée to become SA Lafarge Coppée.

Lafarge purchased a plant from the National Gypsum Company in early-1987. Ten years later, it bought Redland plc, a leadingBritish quarry operator.

In 1999, Lafarge acquired 100% shareholding in Hima Cement Limited, the second-largest cement manufacturer in Uganda, with installed capacity of 850,000 metric tonnes annually, as of January 2011. In 1999, Lafarge entered the Indian market through its cement business,with the acquisition of Tata Steel’s cement activity.This acquisition was followed by the purchase of the Raymond Cement facility in 2001. In 2001, Lafarge, then the world’s second largest cement manufacturer, acquired Blue Circle Industries (BCI), which at the time was the world’s sixth largest cement manufacturer, to become the world leader in cement manufacturing.

In 2006, Lafarge North America shareholders accepted a $3 billion tender offer from Lafarge Group which gave the parent company full control over the North American business, removing LNA from the New York Stock Exchange. Previously the Group had owned 53% of LNA shares.

In 2007, it divested its roofing division, selling it to a private equity group in a deal that resulted in Lafarge retaining a 35% equity stake.

In December 2007, Lafarge announced the purchase of the Orascom Cement Group, an Egyptian based cement producer with operations across Africa and the Middle East, fromOrascom Construction Industries (OCI).

On May 15, 2008 Lafarge acquired Larsen & Toubro Ready Mix-Concrete (RMC) business in India for $349 million.

In 2010, Lafarge strengthened its presence in Brazil (agreement with Lafarge and STRABAG to create a common company in Cement in Central Europe).

In 2011, Lafarge SA announced it would build a cement plant in Langkat, North Sumatra, Indonesia with investment up to Rp 5 trillion ($585 million).

Lafarge launched three plants in Hungary, Syria and Nigeria and created a joint-venture with Anglo American in the United Kingdom.

The Group sold most of its European, South American, Asian and Australian gypsum operations.

In April 2013, Lafarge adopted a new brand baseline “Building better cities”. It reflects the Group’s ambition to contribute to the improvement of cities by developing innovative construction products, solutions and systems. Lafarge’s contribution to better cities addresses some key challenges of urbanization:

  • contribute to more housing in cities;
  • contribute to more compact cities;
  • contribute to more durable cities;
  • contribute to more connected cities;
  • contribute to more beautiful cities.

In September 2013, Lafarge agreed to the sale of its 53.3 per cent stake in its Honduras subsidiary Lafarge Cementos SA de CV to Cementos Argos for €232m.

Proposed merger

On April 7, 2014, Lafarge and Holcim announced they had agreed to terms on a “merger of equals”. The merger would entail Lafarge stock being converted into Holcim stock on a 1:1 basis. Former Holcim shareholders would own 53% of LafargeHolcim. The new company would be based in Switzerland and have a manufacturing capacity of 427 million tons a year would vastly exceed the 227 million ton capacity Anhui Conch, the current industry leader in that category. Lafarge Chief Executive Officer Bruno Lafont will lead the new company, while Holcim’s Wolfgang Reitzle will be chairman.Executives from both companies said the deal would save the new company 1.4 billion euros (US$1.9 billion) annually and create “the most advanced group in the building materials industry.”

The deal will face significant regulatory obstacles, as 15 different jurisdictions could potentially raise objections. The cement market in Europe is already tightly consolidated and antitrust scrutiny of deals has been commonplace since the 1970s. To meet regulatory concerns, Holcim and Lafarge plan to sell or spinoff assets that generated about 5 billion euros (US$6.9 billion) of revenue in 2013 in areas of large overlap between the two companies. Lafont said the merger was aimed at rebalancing operations, not cutting costs. He said overlapping businesses would be sold, not closed, so industry job losses would be minimal.

Industry analysts said the deal would combine Holcim’s marketing strength with Lafarge’s edge in innovation, while providing significant cost savings, but cautioned “the road to merger clearance will be a long, complex and uncertain one.” Others said the deal could lead to further mergers within the industry and give competitors a chance to pick up assets at a bargain price. Most analysts surveyed by Reuters felt the merger would be approved in the end.”

*Information from Forbes.com and Wikipedia.org

**Video published on YouTube by “Lafarge