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Major Holcim investor ‘unlikely’ to vote for merger

One of the biggest shareholders in cement maker Holcim told CNBC he was "unlikely" to vote in favor of merging with Lafarge without knowing who would be the CEO of the merged company.

The tie-up between Switzerland's Holcim and France's Lafarge was announced last year. Previously, Lafarge boss Bruno Lafont was seen heading the combined company, but this proposal was scrapped earlier this month. An alternative chief executive has not yet been named.

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In light of this, David Herro, Holcim's third-largest shareholder and international equity chief investment officer at Harris Associates, said he was "unlikely" to vote in favor of the merger at the extraordinary general meeting scheduled for May 8.

Rolf Soiron, chairman of Holcim Ltd., left, and Bruno Lafont, chief executive officer of Lafarge SA, pose for a photograph during a news conference in Paris, France, on Monday, April 7, 2014.
Ivan Guilbert I Bloomberg via Getty Images
Rolf Soiron, chairman of Holcim Ltd., left, and Bruno Lafont, chief executive officer of Lafarge SA, pose for a photograph during a news conference in Paris, France, on Monday, April 7, 2014.

"It's unlikely. I mean, we really want to see who this person is going to be. And if it's an acceptable person, we will vote for the affirmative. If it's an unacceptable person, in all likelihood we will vote no. So we have not decided how we're going to vote. It really does depend on who the CEO's going to be," he told CNBC on Tuesday.

Harris Associates owns around 6.4 percent of Holcim shares. Herro said the yet-to-be-named CEO of the merged company would not need to come from the cement industry, but would need to be someone "skilled at integrating businesses".

"The problem with the cement industry has been too much capacity, and thereby driving down returns on those assets, and what you need is someone who can unemotionally go through the asset base and make sure that the most-efficient assets are used, the best people are chosen to run those assets, and in as non-political fashion as possible. And so you need an integrator and an operator," he said.

Herro added that he was happy the prospective chief executive was no longer Lafont.

"The proposed CEO was changed and that to me, again, was a positive, because the original proposed CEO was not skilled in the things that I just described, in terms of integration, and running assets, and operating the assets," Herro said.