A conflict between cement makers Lafarge and Holcim deepened on Monday as both groups acknowledged that the terms of their proposed merger of equals may have to be revised to reflect diverging valuations.
The merger "can no longer be pursued in its present form", Holcim said in a statement on Monday, and proposed a renegotiation of the share exchange ratio and "governance issues".
Lafarge is willing to consider revising the share-exchange ratio in the merger but not other aspects of the deal, it said in a separate statement.
The deal announced in April 2014 was supposed to combine the French and Swiss companies on an equal basis but diverging results, share prices and fluctuations in the euro and Swiss franc have led Holcim to seek a revision of the terms.
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Holcim has proposed changing a proposed 1-1 share exchange ratio to 0.875 Holcim shares for each Lafarge share, according to a person familiar with the situation, confirming a Sunday report from Bloomberg.
Lafarge is said to be planning a counter proposal that would trim its weighting to 0.93 to get the deal done, the person added.
Holcim is also said to be pushing for revisions to the management of the combined company, the person said.
Bruno Lafont, chief executive of Lafarge, had been picked to lead the group.
"Lafarge's board of directors remains committed to the project that it intends to see implemented," the French group said on Monday.
For its part, Holcim in its statement said further details would be communicated later.