DAVY VIEW

Reports that LafargeHolcim (LHN) has backed away from the BASF construction chemicals business is a setback in our view. Although it is positive that LHN has maintained its financial discipline, it clearly wanted to do the deal. That would have delivered a key part of the CEO’s strategy to diversify into value-added products and solutions. The BASF deal would have given LHN a platform with scale that would have contributed to the re-rating story. Finding a similar opportunity may prove difficult.