On paper the
question seems incongruous. The first information provided indicates that, on
the contrary, the new group will create synergies (read staff reductions) which
will increase its competitiveness. Duly noted. However, is it relevant that the
world's two leading cement makers - by far - are merging simply in order to
become the super leader in their industry?
Is it relevant
that a cement maker be number one in the world when the industry itself instils
a certain degree of "coherency" in competitors given that it is
currently impossible to ship ready cement very far?
Is it relevant
that a Franco-Belgian company (Lafarge was born of a merger with the Belgian
company Coppée) make a marriage of "equals" that will lead it to
locating its head office in Switzerland while waiting to relocate its top
management there?
Is it relevant
that Lafarge's employees and clients see their group double in size?
Will they
benefit from the merger? Beyond a certain size, it's difficult to build
affectio societatis: employees increasingly see themselves as
"numbers". Has a mega merger ever been carried out in their interest
or that of customers?
Let's be real.
This type of operation feeds management's Ego, shareholder value
and...incidentally, the wallets of intermediaries - investment bankers,
lawyers, etc. - responsible for ensuring its success. Let's not delude
ourselves: that’s its primary "purpose". For companies with dispersed
capital, it's also a way to definitively take cover from all predators, given
their size. These ambitions will probably be fulfilled. But is it really
reasonable to seek such total domination of one's industry? Giants often have
feet of clay.
Is it reason
enough to create a group that will be very difficult to manage? Wouldn't it be
better for shareholders to ask for more information about the benefits for
employees and customers and, more to the point, about the commissions that will
be paid to intermediaries and banks to complete the operation?
Germany has put
supervisory boards in place on which employees are very well represented. This
has prevented this type of cross-border operation to date... France is playing
the market and internationalisation game, even though the decision-making
centres of its greatest companies may leave the country.
What will we
tell our grand-children in a few years if our best companies are no longer
French?
Olivier de
Guerre
Chairman,
PhiTrust Active Investors
