Pit & Quarry, April 2014

Lafarge Holcim agree to merge companies L afarge and Holcim are planning to merge in a deal that would create one company whose combined annual sales are about 43 billion The new company which The Wall Street Journal estimates would be valued at 50 billion would be called LafargeHolcim The deal is expected to close in the first half of next year This proposed merger is a oncein a lifetime opportunity to deliver substantially better value to customers with more innovation a wider range of products and solutions and more sustainability and enhanced returns to shareholders says Rolf Soiron Holcims current chairman in a press release LafargeHolcim will be uniquely positioned to take advantage of growth in developed markets and the worlds fastest growing economies by supplying the materials that will enable the construction industry to meet the challenges of the future According to The Wall Street Journal both Lafarge and Holcim anticipate selling assets as part of the deal Company executives on a conference call would not specify which of the companies assets would be made available Executives did however indicate sales would be concentrated in Europe with about two thirds of THE COMPANIES GAVE NO INDICATION AS OF PRESS TIME WHICH NORTH AMERICAN SITES WOULD BE IMPACTED divestments being European assets The Wall Street Journal adds that Lafarge and Holcim are discussing the need to sell assets in different parts of the world to get regulatory approval About 55 billion in assets need to be sold according to one report Based on reports Lafarge and Holcim have given no indication as of yet on potential sales of North American assets Under the merger the companies say Wolfgang Reitzle would serve as LafargeHolcim chairman Bruno Lafont would be CEO and a member of the board The merger of Lafarge and Holcim will allow the group with strong roots in Europe to enter into a new dimension in our ambition to contribute to building better cities on a global scale and in a sustainable manner says Lafont current chairman and CEO of Lafarge in a press release Upcoming Events NSSGA Young Leaders Annual Meeting Apr 22 26 Palm Springs Calif Coal Prep 2014 Apr 28 May 1 Lexington Ky Transportation Construction Coalition Fly In Rally For Roads June 10 Washington D C AGGREGATES FORECAST DCG Aggregates Consumption Forecast billion metric tons Growth in slumping states a welcome sight BY DAVID CHEREB U S economic growth and construction growth are now growing moderately showing that corporations and workers continue to adapt to a difficult environment States that got hit the hardest during the recession such as California and Florida are now leading the way in growth Even Michigan is growing despite the problems in Detroit as the surrounding counties participate in the auto sales rebound Our numbers show that materials demand in housing has recovered strongly in the past 18 months as home prices have increased As usual this brings with it resistance to further gains as household income has not kept pace making qualifying for a higher mortgage more difficult Thus our BY KEVIN YANIK Billions of metric tons 2010 2011 2012 2013est 2014est 2015est Residential 31 34 38 50 60 45 Nonresidential 48 54 57 57 54 61 Nonbuilding 120 110 106 104 107 115 Total 199 198 201 211 221 221 Yr Yr Ch 25 5 15 50 47 00 Mar 2014 David Chereb Ph D projection that housing demand will flatten by the end of 2014 Improved state budgets are laying the groundwork for higher infrastructure spending But flat to lower federal outlays mean materials demand for the nonbuilding segment will increase only moderately over the next several years David Chereb has many years of forecasting construction materials He received his Ph D in economics from the University of Southern California He can be reached at dc@ davidcherebgroup com 8 PIT QUARRY April 2014 www pitandquarry com