Cement Makers LaFarge and Holcim Push Global Mega Merger, But Unions Protest
The planned merger of Euopean-based global cement giants Holcim and Lafarge into a $44-billion megafirm—the world's largest cement manufacturer—took a key step in smoothing antitrust concerns with the Feb. 1 sale of major global assets to Irish cement firm CRH plc for $7.3 billion.
But international worker unions are protesting the transaction, which is set to create a 136,000-employee giant, claiming it would cost thousands of jobs.
Switzerland-based Holcim and Paris-based Lafarge intend to complete their link, announced in April 2014, by June 30.
Holcim CEO Bernard Fontana told analysts the sale of operations in, primarily, Europe, Canada, Brazil and the Philippines, represents “the vast majority of the divestments” needed for antitrust approval.The blended firm would still operate in 90 countries, he said.
The European Union approved the merger last year.
However, Fontana acknowledged to analysts that the firms are still waiting for regulatory clearance in the U.S., Canada, India, Mauritius and Ecuador. According to a Bloomberg report, Indonesia could approve it after the deal closes.
Competition commissions in 11 African countries have approved the merger through a regional trade bloc, the Common Market for Eastern and Southern Africa (Comesa). Those panels investigate anti-competitive practices.
Comesa members approving the deal include Egypt, Djibouti, Eritrea, Libya, Kenya, Madagascar, Rwanda, Seychelles, Uganda, Zambia and Zimbabwe.
The group "determined that the merger does not raise competition concerns and is compatible with the treaty establishing the common market," said Alexander Kububa, chairman of Comesa's lead competition commission, on behalf of similar panels in the 11 countries.
However, member nation Mauritius did not vote yes, claiming it needs more time to make a decision. The East African nation has invoked a commission clause that allows the merger to be reviewed under its own law if there is a fear of disproportionately reduced competition in the domestic market.
Holcim and Lafarge have been allowed to seek a buyer for the Swiss firm's Mauritius assets and enter into a final binding sale before the merger is approved.
South Africa, which is not a member of Comesa, has approved the Holcim-Lafarge merger on the condition the Swiss firm divest its 52% share in its local business, Afrisam, within three years.
The commission said Holcim’s interest in Afrisam would present anti-competitive effects post-merger that are "compounded by the history of collusion in the South African cement industry.”
Members of Nigeria’s Construction and Civil Engineering Senior Staff Association last month joined workers of Holcim and Lafarge in at least 22 countries, calling for the deal's suspension until job-security issues raised by unions are addressed.
Association President Augustine Etafo said the protestors want Holcim and Lafarge to ensure that "workers in parts of the business that are sold off are protected ... and [that] all worker collective agreements are honored by the merged company.”
In an email response, Holcim spokesman Markus Jaggi said workers’ fears are misplaced because the company "has repeatedly stated this merger is about building the most advanced group in the [cement] industry and not about restructuring our operations.”
The workers’ campaign was launched by the Building and Wood Worker's International and IndustriALL Global Union, both calling for recognition of worker input in the merger.
“The strong global mobilizations are indicative of the anger and frustration of the workers and trade unions at Lafarge and Holcim plants in being sidelined and not consulted throughout the entire merger process,” said BWI General Secretary Ambet Yuson in a statement.
Jyrki Raina, general secretary of IndustriALL Global Union, said, "Workers are demanding respect, and the first step would be for Holcim and Lafarge management to include workers and trade unions as the merger moves forward.”