drywall news

Drywall news  –  gipszkartonarak.hu

Drywall (also known as plasterboardwallboardgypsum boardsheetrock, or LAGYP) is a panel made of gypsum plaster pressed between two thick sheets of paper. It is used to make interior walls and ceilings. Drywall construction became prevalent as a speedier alternative to traditional lath and plaster

Drywall news  –  gipszkartonarak.hu


Holcim, Lafarge in Merger Talks to Create Cement Giant. A Deal Likely Would Face Antitrust Scrutiny but Could Create Firm With Over $41 Billion in Annual Sales


Holcim’s cement production plant in Siggenthal, Switzerland.

Two of Europe’s largest industrial companies said they were nearing a $50 billion merger, a potent show of the prolonged weakness across most of the continent and slowing construction growth around the world.

Cement companies Lafarge SA LG.FR +2.93% of France and Holcim Ltd.HOLN.VX +2.60% of Switzerland—the world’s top two players—said on Friday they were in advanced merger talks that they envisioned as a “merger of equals.”

The possible tie-up could face huge antitrust obstacles and raises political sensitivities in dozens of countries. But the companies may have little choice but to pursue a deal, given their drive to cut overcapacity amid slowing construction in parts of Asia, political upheaval in key Middle East markets and Europe’s sluggish recovery from its debt crisis.

Both companies are linchpins of modern development, providing the raw materials for urbanization across the developing world, from skyscrapers in the Philippines to a shopping mall and residential center in Morocco. As measured by volume, Earth’s seven billion-plus inhabitants consume more concrete than any other commodity except for water.

Born in Europe over a century ago, Lafarge and Holcim both have expanded overseas, and now derive more than half their revenue from outside Europe and North America. But big wagers haven’t panned out. In India, for instance, many construction projects have been put on hold ahead of this month’s general election.

Lafarge and Holcim are both at a strategic moment where “something had to give,” said Cantor Fitzgerald analyst Ian Osburn.

Lafarge and Holcim said in separate statements containing identical phrasing that they “believe that given the strong complementarity of their portfolio and the cultural proximity between the two companies, there is rationale in considering a potential merger that could deliver significant benefits to customers, employees and shareholders.”

The deal still has significant issues to work through, including competition challenges, the likely board makeup and other sensitive political considerations, such as where the combined company would be based, said a person familiar with the matter.

Because cement is both relatively cheap to manufacture and bulky to transport, cement makers build factories close to their main markets.

As a result, Lafarge and Holcim have become leading players in many of the same markets around the world. The companies’ combined share of cement-making capacity would exceed 50% in the Philippines, Morocco and Canada, among other countries, analysts estimate. In Serbia, the combined market share would exceed 80%.

The global cement market is largely divided between four big players—Lafarge, Holcim, Mexico’s Cemex SA CEMEX.MX +1.35% B and HeidelbergCement AG HEI.XE +1.64% of Germany. In 2013, Holcim was the world’s largest cement maker in terms of revenue, with total sales of $22 billion, followed by Lafarge with total sales of $20.82 billion, Heidelberg with about $18 billion and Cemex with about $15.2 billion.

A Cemex spokesman said the company had no comment in the planned merger. A HeidelbergCement representative couldn’t be reached for comment.

Lafarge and Holcim have each been through ill-timed investments. Both stacked up sizable debt to expand globally but were tripped up by the housing crash in the U.S. in 2008 and the European sovereign debt crisis, which had a deep impact on their business, particularly in the hardest-hit countries in Southern Europe.

Lafarge was further hit by the upheaval of the Arab Spring in 2011 and 2012 as it had bet heavily on the Middle East market by buying up Egyptian company Orascom Cement.

After peaking at €17 billion, or roughly $23 billion, in 2008, Lafarge said its debt stood at €10.3 billion at the end of 2013.

Natixis analyst Abdelkader Benchiha said a deal with Holcim could help bring down Lafarge’s financing costs, since the Swiss company has a better rating than its French counterpart.

A merger of Lafarge and Holcim would bring some of Europe and the Middle East’s largest fortunes under a single roof. Through the Groupe Bruxelles Lambert holding company, Belgian billionaire Albert Frère is the leading shareholder in Lafarge, with a 20.9% interest.

The family of Egyptian tycoon Onsi Sawiris has a 13.9% stake in Lafarge, stemming from its 2008 sale of Orascom Cement to the French company.

Meanwhile, Thomas Schmidheiny, who led Holcim for more than two decades until he retired as chairman in 2003, has a 20.1% stake—worth more than $6 billion—in the Swiss company.

It isn’t clear whether Messrs. Frère and Schmidheiny or the Sawiris family might want to use a merger of Lafarge and Holcim to unload their stakes and exit the cement industry or instead extend their commitment to the business.

“As long as this is an ongoing process, Mr. Schmidheiny will not comment in any way at this stage,” said his spokesman Jörg Denzler.

A spokeswoman at GBL declined to comment. Representatives of the Sawiris family couldn’t immediately be reached.

Lafarge was created as a limestone purveyor in 1833 by Joseph-Auguste Pavin de Lafarge in the southern Ardèche French region, from where it supplied construction projects as far away as the Suez Canal in the late 19th century.

The cement maker extended its reach in the following century to become the world’s largest cement company, until it was recently surpassed by Holcim.

Holcim was set up in 1912 and gradually expanded across Europe. The company changed its name to Holcim Ltd. from Holderbank Financière Glaris Ltd in 2001, and four years later entered India through an alliance with Gujarat Ambuja Cements.

India is now its biggest single market, making up around a third of its overall sales.

But the Indian market has come under pressure, with muted growth and lower volumes during 2013. Holcim says it has also become significantly harder to push through price increases, both in India and elsewhere.

News of the potential deal boosted the European cement makers’ shares on Friday, with Lafarge closing up 8.9% at €64.09, and Holcim rising 6.9% to 80.20 Swiss francs.

The markets have been excited about a potential deal before. In September 2008, shares in both cement makers jumped on speculation about a merger. At the time, a person close to Lafarge said such a move wasn’t conceivable “considering the size and strategy of both groups.”

The European Commission, the European Union’s executive arm and antitrust watchdog, is likely to give any deal a thorough review, given past scrutiny of the industry, antitrust lawyers said.

The commission is already investigating Holcim’s acquisition of Cemex’s plants in western Germany, as well as the planned combination of Cemex’s and Holcim’s Spanish operations in which Holcim would have a 25% stake. Brussels warned in October that the former deal might reduce competition in parts of Germany and Belgium where the two companies compete.

In order to secure regulatory approval, the companies are likely to propose a series of divestments. Lafarge’s protracted 2013 merger with Tarmac, Anglo AmericanAAL.LN +2.34% PLC’s British construction business, was approved by U.K. antitrust authorities only after both agreed to sell a significant number of assets.

A Lafarge spokeswoman declined to comment on potential asset sales. Holcim declined to comment beyond the statement.

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