Swiss cement group Holcim and French rival Lafarge are to merge, creating a dominant supplier of cement for concrete to the global construction industry.
The deal, described in a statement on Monday as “a merger of equals”, and a major event in the global construction industry, will be based on the offer of one Holcim share for one Lafarge share.
The two groups made a commitment to sell assets to pre-empt anti-trust objections from competition authorities.
On the Swiss stock market, the price of Holcim shares jumped 5.24 per cent to 84.40 Swiss francs in initial trading and in Paris, Lafarge shares were up 4.57 per cent to 67.02 euros. Their stocks had already reacted to rumours of merger talks on Friday.
The new company will be called LafargeHolcim and “will have a unique position in 90 countries and will be evenly balanced between developing countries and countries with strong growth”, the firms said in a joint statement.
Figures in the statement show that the new giant will employ 136,000 people across the countries where it operates.
It will be in a powerful position as a supplier of a basic input for all types of building construction, a sector in which new technologies are being used increasingly in materials, including cement.
Building supply companies have been expanding in emerging countries, where they see huge opportunities for growth from the construction of buildings and infrastructures.
The new entity would have annual sales of 32 billion euros ($A47.52 billion) and underlying profits on a basis of earnings before interest, tax depreciation and amortisation, of 6.5 billion euros ($A9.65 billion).
The deal had the unanimous support of both boards and of core shareholders.
The two firms said on Friday that they were in merger talks, and reports on Sunday said the respective boards agreed the move during weekend meetings.
The companies are aiming to complete the deal by the first quarter of 2015. Shares in the new firm will be listed on stock exchanges in Paris and Zurich.