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Cement industry shows signs of resurgence

Virginia residents involved in the field of construction may be interested to read that the cement industry may be a barometer for the recovering construction industry, according to experts. The gross amount of business transactions in this industry topped $22 billion in the past 12 months, the highest level since May 2008, and there is talk of a merger between two of the world's biggest cement makers.

Holcim Ltd. and Lafarge SA have a combined market share of more than $50 billion. The companies are evidently feeling confident enough about the recovering market to consider the possibility of coming together to form a strong alliance. The merger would cut costs for cement producers, particularly in light of the losses sustained in the last six years as demand for building materials plummeted.

The Holcim/Lafarge merger follows in the steps of the Martin Marietta Materials Inc.'s takeover of Texas Industries Inc. for $2.7 billion. This deal was the biggest so far in North America in the past five years. The new merger is based on the two companies approaching each other as equals rather than as one large company overtaking a smaller one. With cement consumption set to rise 8.1 percent in 2014, these companies believe that now is the time to get ahead of the recovery.

A business attorney helps companies that are considering acquisitions and mergers. These transactions can be very complicated, so it is usually wise for companies to have legal advice before venturing into a merger situation. With the help of a business attorney, companies can be sure that they have representation of their interests at the negotiation table and that any contracts that are presented are reviewed thoroughly.

Source: Bloomberg, "Cement Deals Lay Foundation for Building Boom: Real M&A", Tara Lachapelle, Thomas Black, Brendan Case, April 04, 2014

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