Orascom Cement is the largest cement producer in the Middle East and Mediterranean basin, operating in key markets including the United Arab Emirates, Iraq and Saudi Arabia.

The move will greatly accelerate Lafarge’s growth in these fast growing and profitable, emerging markets.

“The two companies are wholly complementary geographically with considerable potential for synergies. We will create a powerful operational regional centre in Egypt,” said Bruno Lafont, chairman and CEO of Lafarge.

“Through this acquisition, Lafarge is considerably strengthened, with a presence in all of the fastest growing regions of the world.”

Orascom Cement operates 10 facilities and is forecast to have a production capacity of 35 million tonnes by the end of 2008. Several new plants are also under construction, which are due to raise output by a further 10 million tonnes by 2010.

As part of the deal, Nassef Sawiris, the majority shareholder of Orascom Construction Industries, will take an 11.4% shareholding in Lafarge.