Swiss cement maker Holcim plans to exchange some assets and combine others with Mexican rival Cemex in Europe, seeking cost savings in response to tough conditions in the construction sector.

Holcim said it would boost operating profit by as much as €30 million. It will pay Cemex €70 million in cash, mainly reflecting the size and value of Cemex’s German business, which includes some 100 readymix and other plants.

Holcim will acquire Cemex's operations in western Germany, while Cemex will take over Holcim's operations in the Czech Republic. The two companies will combine their operations in Spain, with Holcim taking a 25 per cent stake in the combined entity. Holcim chief executive Bernard Fontana has already closed plants, cut costs and slashed capacity to try to boost profitability. – (Reuters)