UK MIDDAY BRIEFING: CRH Falls As Cement Mega-Merger Thrown Into Doubt

LONDON (Alliance News) - CRH shares are under pressure Monday after the merger between Switzerland's Holcim and France's Lafarge was thrown into doubt, also putting the Irish building products company's separate deal to snap up assets from the pair at risk.

Holcim said its board had concluded that it can no longer pursue a merger with French rival Lafarge SA on the current terms of the proposed deal, and it wants talks about changing the exchange ratio and "governance issues". Lafarge responded by saying it was committed to the deal, but would refuse to negotiate on anything but the exchange ratio.

Holcim wants a bigger share of the combined entity and also changes to the proposed management of the group, a move that's being pushed by its large shareholders after its shares and operating performance outperformed that of Lafarge since the deal was first announced in April last year, according to Bloomberg citing people familiar with the matter.

Under the original terms of the deal, the two companies' shareholders were to get an equal share of the combined group, while Lafarge Chief executive Bruno Lafont was to run it.

London-listed CRH noted the announcements by the two companies, but said its extraordinary general meeting on Thursday will go ahead to allow its shareholders to approve the acquisition of assets being offloaded by Holcim and Lafarge to get the deal through antitrust regulators.

CRH announced last month that it had agreed a EUR6.5 billion deal with the pair to buy assets from the companies primarily in Europe, Canada, Brazil and the Philippines. The Irish building materials company expects the deal to boost earnings per share by about 25% in the first full year of ownership of the assets, which it expects to be 2016.

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Markets: UK stocks are trading higher Monday, with investors focused on the US Federal Reserve's monthly meeting ending on Wednesday. This week will be driven mainly by central bank news, with European Central Bank President Mario Draghi speaking Monday in Frankfurt, the Bank of Japan's monetary policy decision due on Tuesday, and the minutes of the Bank of England's recent monetary policy committee meeting due on Wednesday.

Wall Street is set for a higher start, with stock futures indicating that the DJIA, S&P 500 and Nasdaq 100 will all open up 0.3%.

FTSE 100: up 0.5% at 6,774.45
FTSE 250: up 0.4% at 17,169.68
AIM ALL-SHARE: down 0.1% at 717.01
GBP-USD: up at 1.4782
EUR-USD: up at 1.0528
GOLD: down at USD1,156.25 an ounce
OIL (Brent): down at USD54.18 a barrel
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Afternoon Watchlist (all times in GMT)

12:30 US NY Empire State Manufacturing Index
13:15 US Industrial Production
14:00 US NAHB Housing Market Index
18:45 EU ECB President Draghi's Speech
20:00 US Total Net TIC Flows
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Tuesday's Key UK Corporate Events

French Connection Group - Full Year Results
Regenersis - Half Year Results
Antofagasta - Full Year Results
Mears Group - Full Year Results
IG Group - Interim Management Statement
Fairpoint Group - Full Year Results
J Sainsbury - Q4 Trading Statement
WANdisco - Full Year Results
Just Eat - Full Year Results
SafeCharge International Group - Full Year Results
Onesavings Bank - Full Year Results
Gfinity - Half Year Results
Good Energy Group - Full Year Results
KBC Advanced Technologies - Full Year Results
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Tuesday's Key Economic Events (all times in GMT)

n/a Japan BoJ Monetary Policy Statement
n/a Japan BoJ Press Conference
10:00 EU Consumer Price Index
10:00 EU Employment Change
10:00 Germany ZEW Survey
10:00 EU ZEW Survey
12:30 US Housing Starts
23:50 Japan Merchandise Trade Balance Total

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