Cement firms Holcim and Lafarge agree mega-merger

Swiss cement firm Holcim is to buy French rival Lafarge to create the world's biggest cement maker with combined sales of 32bn euros (£26.5bn; $44bn).

Under the terms of the deal, Lafarge shareholders will receive one Holcim share for each Lafarge share they own.

The two firms said they would sell some assets to ease competition concerns.

The companies added they forecast total annual savings from joining forces of 1.4bn euros.

The two firms had announced on Friday that they were in advanced talks over a deal.

"The new group will offer higher growth and low risk, thus creating more value," said Lafarge chief executive, Bruno Lafont, who will become chief of LafargeHolcim.

The combined firm will be based in Switzerland.

The deal may help the firms cope with higher energy prices and weaker demand that have hurt the sector since the financial crisis.

The new company will be worth about £33bn based on Friday's closing share prices.

Although the firms have overlapping operations in Europe, Lafarge is strong in Africa and the Middle East, whereas Holcim is almost absent in these regions.

Meanwhile, Holcim is strong in Latin America, where Lafarge is not established.