Long-planned merger of two cement giants on shaky ground

On Sunday afternoon a week ago, Bruno Lafont, the chief executive of Lafarge took a call from Wolfgang Reitzle, the chairman of Swiss cement company Holcim, seeking to merge with its French rival. He had bad news.

Reitzle had just sat through a board meeting at which the panel voiced its increasing dissatisfaction with the merger terms, not least with Lafont’s future role as leader of the combined entity. A letter had been drafted, Lafont heard down the line, demanding far-reaching changes, including his scalp.

Lafont was stumped. Just two days earlier, teams from both companies were still poring over the merger’s progress in meeting rooms at Roissy airport near Paris. While the underperformance of Lafarge compared to Holcim in recent months hadn’t escaped attention, the Lafarge group wasn’t prepared for this. With the Swiss going on the offensive via a letter that questioned Lafont’s credentials, the creation of an industry leader, the pinnacle of his career, risked crumbling.