Rainmaker: Giants cement new partnership and building towards industrial revolution

However, just one month after the Lafarge-Holcim deal was announced in April, another French group, Publicis, watched its merger of equals with Omnicom implode after a clash of egos and tax doubts.

Determined not to see their deal follow the same path, Lafarge and Holcim have taken the brave step of trying to pre-empt regulatory concerns by proposing €5bn worth of disposals. Second-guessing competition regulators is often for the foolhardy, but both sides have experience of the European Commission’s offices.

This month, first round bids are due for earmarked assets and interest has already been lodged by global private equity funds including CVC, Blackstone, Cinven, TPG, Carlyle and KKR, and industry rivals such as HeidelbergCement and CRH.

Picking the right acquirer will be a delicate balancing act and Lafont has made it known that he will not rule anything out. It is unlikely there will be a clear picture of front runners imminently.

The so-called disposal committee, chaired by Lafont and advised by Credit Suisse, HSBC, Morgan Stanley and BNP Paribas, must weigh offers from cherry-pickers, who might offer punchy premiums for individual assets, against other suitors who look to buy up whole geographies.

One of the jewels will be Lafarge’s Tarmac – the unwinding of which must come as a blow after it took three years to complete its 50:50 joint venture with Anglo American due to investigation by the UK Competition Commission. After spending so much time putting together a deal and so much money on competition lawyers, you might expect Lafont to be wincing at the thought of dumping the carefully crafted UK asset. However, he is content – believing that under Lafarge’s joint control the road surfacing business has already made enough improvements to justify a higher price tag. If all goes well, the synergies and strength of the cement powerhouse will significantly outweigh the pain of watching Tarmac fall into new hands.

more