A deal to create the world’s largest cement maker in what would have been the global industry’s biggest merger is now in doubt after Swiss firm Holcim said its tie-up with France’s Lafarge could not go ahead "in its present form".
The two firms agreed to merge in April, with Lafarge shareholders receiving one Holcim share for each Lafarge share. But since then, Holcim’s shares have outperformed Lafarge’s.
In a letter sent 15 March Holcim said it now wanted to negotiate "in good faith" both the agreed share exchange ratio and governance issues.
If a merger were to go ahead the combined company would have sales of about €32bn (£22.8bn; $33.8bn).
In a statement, Holcim said its board "has concluded that the combination agreement can no longer be pursued in its present form, and has proposed to enter into negotiations in good faith around the exchange ratio and governance issues."
It added: "Lafarge has indicated that it refuses to renegotiate, except the exchange ratio. Further details will be communicated in due course."
For its part, Lafarge issued a statement saying: "Lafarge’s Board of Directors remains committed to the project that it intends to see implemented. The Board said it is willing to explore the possibility of a revision of the parity, in line with recent market conditions, but it will not accept any other modification of the terms of the existing agreements."