Filaret Galchev / D. Grishkin / Vedomosti

Holcim's second-largest shareholder, Eurocement (which holds 10.8 percent of the shares), plans to vote against the merger of Holcim and Lafarge at a shareholders' meeting on May 8, The Wall Street Journal (WSJ) and the Swiss Sonntagszeitung reported. Representatives of Eurocement, Holcim and Lafarge declined to comment.

Lafarge's merger proposal is unsatisfactory and unfinished, writes Sonntagszeitung, citing a trusted person of businessman Filaret Galchev, who owns Eurocement. In particular, the exchange of Lafarge shares for Holcim papers at a ratio of 1 to 0.9 is not a worthy offer for Holcim shareholders. The businessman is unhappy that the merger is positioned as quasi-equal, although Holcim is a stronger partner. The WSJ source says that this is the only condition that Galchev is not satisfied with. Earlier, Financial Times sources close to Eurocement Group said that the businessman approves of the merger, since he will have the opportunity to buy the assets put up for sale. The American investment fund Harris Associates (which owns 6.8% of Holcim shares) said on Friday that the fund needs to know who will manage the company after the merger in order to decide on support.

This is not the first demand to change the terms of the merger. The French and Swiss manufacturers called the merger a "merger of equals": the companies were to exchange shares at a rate of 1 for 1, for which Holcim had to increase its capital. The deal, worth 42 billion euros, was to be completed in 2015 and lead to the creation of the largest cement producer in the world. But in mid-March, Holcim changed the terms. After the announcement of the deal, Holcim shares rose more than Lafarge shares, in particular due to the sharp strengthening of the Swiss franc. As a result, it was decided to exchange 9 Holcim shares for 10 Lafarge shares. Yesterday, Holcim was worth 23.96 billion Swiss francs ($24.76 billion) on the Swiss Stock Exchange, Lafarge on the Paris Stock Exchange – 17.39 billion euros ($18.81 billion).

Unless otherwise provided by the shareholders' agreement, Eurocement cannot block the deal, says Art de lex practice head Artur Zurabyan. But if he and other minority shareholders vote against it, the company will have to buy out their shares at market price, which could be burdensome, he believes.

Eurocement intends to vote against the merger of Holcim and Lafarge