Geneva: Swiss cement group Holcim and French rival Lafarge are merging to create the biggest global concrete group worth €40 billion, with an eye to booming construction in emerging markets, they said on Monday.

The deal, a major event in the global construction industry described in a joint statement as “a merger of equals”, will be based on the offer of one Holcim share for one Lafarge share.

The two groups together have a stock market value of €40 billion (Dh201.31 billion), Holcim chairman Rolf Soiron told a press conference.

The companies made a commitment to sell assets to pre-empt anti-trust objections from competition authorities.

Soiron said these disposals would account for annual sales of €5 billion, two thirds of which would occur in Europe.

Lafarge assured that the deal would not lead directly to plant closures.

On the Swiss stock market, the price of Holcim shares jumped 3.37 per cent to 82.90 Swiss francs in morning trading. In Paris, Lafarge shares were up 3.06 per cent to €66.05. Their stocks had already risen sharply on Friday to rumours of merger talks.

The new company will be called LafargeHolcim and “will have a unique position in 90 countries and will be evenly balanced between developing countries and countries with strong growth,” the firms said in a join statement.

They highlighted the match of their activities since Lafarge has a strong presence in Africa and Holcim in Latin America.

However they both have big and competing interests in Europe.

In Zurich, stock analyst Ute Haibach at brokers J. Safra Sarasin said the deal should result in “more balanced exposure in emerging markets.”

At stock brokers Aurel BGC in Paris, analysts said that the merger would be “long and complex but was technically possible”.

Figures in the statement show that the new giant will employ 136,000 people across the countries where it operates, have annual sales of €32 billion and underlying profits of €6.5 billion.

The deal would generate economies of scale of 1.4 billion euros over three years.

LafargeHolcim will be in a powerful position as a supplier of cement for concrete, a key material in the construction of buildings and infrastructure. It is a sector in which new technologies are being used increasingly in materials, including cement.

Building supply companies have been expanding in emerging countries where they see huge opportunities for growth from the construction of buildings and infrastructure.

But both companies are facing sluggish conditions in the European construction industry.

Soiron said the merger offered “a once in a lifetime opportunity to deliver substantially better value to customers with more innovation, a wider range of products and solutions” and to raise returns for shareholders.

The combined group would be “uniquely positioned to take advantage of growth in developed markets and the world’s fastest growing economies,” he said.

Lafarge chief executive Bruno Lafont said the merger would “set up the most advanced group in the construction industry, for the benefit of our clients, our employees and our shareholders.”

The new firm’s chairman will be Holcim’s Wolfgang Reitzle, with Lafarge’s Lafont becoming its chief executive officer. Holcim and Lafarge will each have seven seats on the new firm’s board.

The headquarters of the company will be in Switzerland but Lafont told the press conference that the new entity would not pull out of France, where the downsizing of industrial companies is a hot political issue.

The companies are aiming to complete the deal by the first quarter of 2015. Shares in the new firm will be listed on stock exchanges in Paris and Zurich.

Founded in Switzerland in 1912, Holcim employs 71,000 people, with production sites in about 70 countries and a market presence on every continent.

In notched up net sales of 19.7 billion Swiss francs (16.1 billion euros, $22.2 billion) in 2013.

Lafarge began as a French limestone-quarrying company in 1833, and now employs 65,000 people in 64 countries, with annual sales of €15.8 billion.