Eric Olsen Named CEO of LafargeHolcim

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  • Lafarge executive will head of the globe-spanning cement giant following merger

Future CEO Olsen of the new merged entity LafargeHolcim smiles during a news conference in ZurichZURICH—France’s Lafarge SA and Swiss rival Holcim Ltd. appointed a long-serving Lafarge executive as chief executive of the globe-spanning cement giant their $44 billion merger will create.

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The two companies said Eric Olsen, who currently serves as Lafarge’s Executive Vice-President of Operations, will run LafargeHolcim when the union is completed in July. Mr. Olsen, 51, has been with Lafarge since 1999, holding a variety of positions in the cement company’s North American operations, including chief financial officer.

The appointment puts an American-born executive in charge of the construction industry giant, which had combined sales of roughly $33 billion in 2014. Mr. Olsen, who comes from Chicago, is a business graduate from the University of Colorado. He became a joint U. S-French-citizen last year after moving to France 11 years ago.

“It is not a question of passports, but my multicultural experience will help the teams work together,” said Mr. Olsen, who oversaw the overhaul of Lafarge’s management structure which ran from 2011 to 2012.

Holcim Chairman Wolfgang Reitzle, who will be chairman of the combined company, is to begin lobbying shareholders to support the deal, which was nearly wrecked last month amid a fight over who should run the company. Lafarge CEO Bruno Lafont, who was slated to run the combined company, stepped aside to save the deal.

The companies need to “communicate convincingly the big advantages coming with the merger,” Mr. Reitzle said.

Holcim and Lafarge described Mr. Olsen’s appointment as a milestone toward completing the deal, which has been in the works for more than a year. Next month, two-thirds of Holcim shareholders must approve a capital increase that effectively serves as a referendum on the combination. A similar proportion of Lafarge shareholders will need to tender their shares for stock in the new company to complete the deal.

Thomas Schmidheiny, who owns 20.1% of Holcim which was founded by his great grandfather, has supported the deal, but some other shareholders have been hesitant.

Mr. Reitzle said he understood the concerns of some shareholders about the size and complexity of the combination, one of the largest recent deals in Europe. But a successful merger “can create a lot more value than even the best managed Holcim on its own can,” he said in a brief interview.

Advantages included reduced capital expenditure, the benefits of joint research and development and a reduction in costs because the combined company will be a big purchaser of raw materials.

Market Talk

Vontobel Skeptical Over Holcim-Lafarge Merger Prospects

Vontobel has cut its Holcim price target to 82 Swiss francs from 84 francs amid rumbling opposition to its planned merger with Lafarge. “Filaret Galchev, Eurocement’s owner, could oppose the deal and there has been a vote launched against ‘an unfair merger with Lafarge’ by group called Community of Interest Pro-Holcim,” says analyst Christian Arnold. “Due to the recent news flow regarding the shareholders opposition we weight the merger scenario at 50%, compared with the previous 75%,” he adds. Mr. Arnold is noncommittal on the naming of Lafarge executive Eric Olsen as future CEO of LafargeHolcim. Holcim and Lafarge shares open narrowly higher on Thursday.

Market Talk is a stream of real-time news and market analysis that’s available on Dow Jones Newswires

So far, the companies have identified €1.4 billion ($1.5 billion) in cost savings from the planned tie-up.

Mr. Olsen, who will move from to Zurich from Paris, will be introduced to shareholders as part of the lobbying campaign, Mr. Reitzle said.

Mr. Olsen joined Lafarge North America in 1999 as senior vice president for strategy and was responsible for integrating acquisitions in the region. He was also involved in the integration of Egyptian cement maker Orascom Cement after Lafarge bought it in 2007.

In his current role, Mr. Olsen has responsibility for a range of important markets, including France, the U.S., Brazil and Egypt. He has also held senior roles in operations, finance, human resources and strategy.

Mr. Olsen represented a good fit for the task of leading the new entity, a spokesman for Mr. Schmidheiny said. “One question has now been solved and Mr. Olsen is a very good choice,” said the spokesman. The two largest shareholders in Lafarge, the Sawiris Nassef family and the Groupe Bruxelles Lambert SA, who together control roughly 35% of Lafarge, also backed the appointment.

Babatunde Akinsola
Babatunde Akinsolahttps://naija247news.com
Babatunde Akinsola is aNaija247news' Southwest editor. He's based in Lagos and writes on the Yoruba Nation political issues, news and investigative reports

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