PARIS (Reuters) - Lafarge (PA:LAFP) boss Bruno Lafont had to be removed as chief executive-elect of a merged Lafarge-Holcim cement group because of the "value drift" that occurred after the tie-up was announced last April, his counterpart at Holcim (VX:HOLN) said.
In an interview with France's Journal de Dimanche, Bernard Fontana, chairman and chief executive of the Swiss side of the proposed Franco-Swiss partnership, said last week's decision to change the management structure as well as the one-for-one share exchange ratio was not about style and national differences but about performance.
"I am French and a Polytechnician," he said in a reference to the elite French school that educates top French executives. "So I am the proof that Holcim can be run despite the cultural differences between a Swiss and a French management style ... But when a value drifts, that raises a governance problem.
"My main subject since the announcement of the merger has been to keep the teams focused on performance and it is that which brought about the new calculation on parity."
Under pressure from its shareholders as Lafarge's earnings outlook dimmed relative to Holcim's, the Swiss company threw the merger in to doubt a week ago by telling Lafarge it wanted to renogotiate the terms of the deal.
After days of intense talks, during which Lafont spoke of "cheap tricks", the two sides agreed new terms that gave Holcim shareholders a better deal and made Lafont a non-executive co-chairman, alongside Fontana, rather than CEO.
However, the lack of a decision on a replacement CEO, who would not be on the board under the new arrangement, leaves questions over what tensions remain between the two sides and the degree of support among Holcim shareholders.
Lafont's removal from the role, and the realigned share exchange at nine Holcim shares for 10 Lafarge shares, also make the deal look less like the merger of equals it was presented as almost a year ago.