Holcim, Lafarge Launch Combined Company

ZURICH—Holcim Ltd. and Lafarge SA on Wednesday officially launched their new combined building materials company after overcoming a series of regulatory hurdles and challenges over the terms of the merger, which was first announced a year ago.

Shares in LafargeHolcim Ltd. made their debut on the Swiss and Paris stock exchanges on Tuesday, with a market capitalization of roughly 41 billion Swiss francs ($43.2 billion).

Chief Executive Eric Olsen said the company remained committed to delivering annual savings of €1.4 billion ($1.54 billion) within three years and would also concentrate on integrating the two companies, reducing capital spending, and creating new products and services.

"This event marks our entry into a new era," said Mr. Olsen. "We are now clearly the leader of the building materials industry."

The new company has combined sales of 33 billion francs and operations in 90 countries, dwarfing rival cement-makers such as Germany's HeidelbergCement AG and Mexico's Cemex SAB de CV.

Mr. Olsen said LafargeHolcim had overcome what seemed like "insurmountable" obstacles to complete its merger that was into doubt earlier this year following a disagreement over the exchange ratio and the leadership of the combined company.

"Indeed there were many roadblocks and hurdles along the way that we had to overcome," said Mr. Olsen, a 51-year-old American-born executive who also holds French citizenship.

As well as convincing shareholders to back the merger, both companies also had to shed plants around the world to get approval from regulators.

Jona, Switzerland-based Holcim finally received the go-ahead earlier this month to create the new company after enough Lafarge shareholders offered their stock and the French financial regulator approved the deal.

LafargeHolcim has been established to pivot the two companies away from developed markets toward faster growing economies in Africa and Asia where demand for cement is growing faster.

Mr. Olsen said the new company would have around 60% of its sales in emerging markets, but expected the proportion to rise in future.

The wider global spread would enable the LafargeHolcim to weather downturns in individual markets such as China, he said at a news conference.

The combined company has also begun looking where it can reduce costs, particularly in procurement. Both companies combined spend roughly €16 billion a year on fuel, raw materials and equipment, a bill it is aiming to reduce by €340 million.

A team of 200 experts has begun working to see how the cement plants can become more efficient. The first results of the merger will be seen within 300 days, Mr. Olsen said.

Holcim and Lafarge will present their half-year earnings as stand-alone companies later this month and report their first results as a combined company at the nine-month stage later this year.

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