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Holcim signs a conditional agreement to sell its majority stake in Holcim South Africa to a Black Economic Empowerment Consortium.

August 24, 2006


Holcim signs a conditional agreement to sell its majority stake in Holcim South Africa to a Black Economic Empowerment Consortium.

Since political transformation in 1994, the government of South Africa has introduced legislation and supported industry self-regulation aimed at ensuring an equivalent economic transformation, termed Black Economic Empowerment ("BEE"). Goals of BEE are to bring about a significant increase in the ownership, management and control of the economy by South Africans from historically disadvantaged communities. Holcim has been fully supportive of the process of transformation in South Africa and has committed itself to ensuring meaningful and sustainable BEE in its South African Group company.

As a result, Holcim has signed a conditional agreement to sell 85 percent of its stake in Holcim South Africa to a BEE Consortium based on an enterprise value of ZAR 15.5 billion. Holcim would maintain a 15 percent share in the newly founded AfriSam, which would hold a 54 percent stake in Holcim South Africa. Holcim would continue to provide technical assistance.

AfriSam Consortium is a broad-based BEE company established specifically for the proposed transaction. Its shareholders will include all employees of Holcim South Africa as well as a number of charities and broad-based groups, and will be led by new entrant BEE group Bunker Hills Investments. Completion of the transaction is subject to inter alia regulatory approvals and the completion of AfriSam Consortium's financing process. Holcim expects to be able to conclude the transaction in 2007, at which time the South African Group company would be deconsolidated from Holcim. Until that time Holcim will continue to have control of Holcim South Africa.

For 2005, Holcim South Africa reported an operating profit of approximately CHF 240 million on sales of CHF 835 million, with a workforce of some 2,000. The company owns two cement plants and a grinding station in South Africa and has a 62.5 percent interest in Tanzania-based and listed Tanga Cement Company. The total annual cement capacity is 4.1 million tonnes. Holcim South Africa is also involved in the aggregates and ready-mix concrete businesses.

With the proposed transaction, Holcim would not only ensure sustainable BEE for Holcim South Africa, but also create an excellent platform for further growth of this company. Holcim firmly believes that this is in the best interest of the shareholders of Holcim and of Holcim South Africa.

Shareholder structure

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Holcim is one of the world's leading suppliers of cement and aggregates (crushed stone, sand and gravel) as well as further activities such as ready-mix concrete and asphalt including services. The Group holds majority and minority interests in more than 70 countries on all continents.
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This media release is also available in German.
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Corporate Communications: phone +41 58 858 87 10
Investor Relations: phone +41 58 858 87 87
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This media release is for general information and convenience purposes only and does not constitute a legal instrument. In particular, without limitation, it does not constitute a public or private offering or placement, an offer of or solicitation for the purchase or disposal of, trading or any transaction in any securities (including without limitation Holcim securities) or other offer or solicitation, prospectus, information memorandum, offering circular or similar instrument or investment, legal, tax or other advice in any country and/or law or jurisdiction (including without limitation the Republic of South Africa, the United States of America, the European Economic Area and Switzerland). Investors must not rely on this information for investment decisions. In addition, this media release may contain forward-looking statements and statements on future developments. We wish to call the attention of readers to the fact that such forward-looking statements are made without any guarantee as to the future course of business; these statements involve risks and uncertainties. Due to a variety of factors, the final outcome may under certain circumstances differ considerably from the forward-looking statements made herein.