NEW YORK (The Deal) -- Switzerland's Holcim is willing to hand Lafarge CEO Bruno Lafont a face-saving role in a merged company but remains adamant that the companies' $39 billion merger will not proceed with the Lafarge chief in charge of the combined group.

"Both sides remain keen to see the deal finalized, and if that means finding a role for Lafont, which isn't CEO, then that is something that can be done," said a source with knowledge of the situation.

Installing Lafont as co-chairman alongside Holcim's Chairman Wolfgang Reitzle is one of the options that has been discussed, though no agreement has been reached, according to the source. Holcim has also signaled that it could install another Lafarge person in the role of CEO. The French company's CFO, Jean-Jacques Gauthier, has been suggested as a possible candidate.

The companies have been scrambling to save their deal since Sunday, when Holcim told Lafarge it could no longer accept the terms of the merger and demanded the removal of Lafont as CEO-elect and an adjustment to the share exchange ratio. Lafarge on Monday said it was willing to alter the exchange ratio but ruled out renegotiating Lafont's role, though that position is understood to have softened.

"The idea is to find a balanced governance for the combined group that is in the spirit of the merger of equals," said a second source. "There are a lot of meetings going on at the moment."

Holcim and Lafarge announced plans last April to merge the bulk of their operations to create a cement maker with sales of about €32 billion ($34.1 billion) and about €6.5 billion of earnings before interest, taxes, depreciation and amortization. The combination was expected to deliver €1.4 billion of cost savings over three years, with about €466 million realized in the first year.

Holcim representatives working on the integration process fell out with Lafont over his autocratic management style and a perception that he was favoring Lafarge over Holcim in the structuring of the deal.

"He failed to position himself as a man in which Holcim could have confidence," said the first source. "It wasn't any one thing, it was an accumulation of factors that suggested he saw the process as a one-sided affair."

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Holcim's board held a conference call late Wednesday to discuss the various options for the leadership and a change to the share exchange ratio, which had been set at one-for-one. Lafarge's board is due to meet on Thursday, when it could formulate its formal response to Holcim's request for changes.

The merger deal has been under pressure since early February, when Holcim shares broke free of their bond with Lafarge after the French company underperformed its would-be partner. Holicm shares have gained 10% relative to Lafarge since the start of February.

Holcim earlier this week asked for a swap ratio of 0.875 of a share for each Lafarge share, while the French company countered with an offer of 0.93. The two groups have since converged on a ratio of about 0.9 of a Holcim share for each Lafarge share, according to media reports that could not be verified.

Holcim and Lafarge declined to comment on the negotiations.

On Thursday, shareholders of Ireland's CRH (CRH) - Get Report overwhelmingly backed their company's plan to pay €6.5 billion for assets put on the block by Holcim and Lafarge. That deal is dependent on the merger going ahead.

Shares in Holcim traded Thursday in Switzerland at 75.65 Swiss francs ($76.17), up 0.65 Swiss francs, or 0.8%. Lafarge shares traded at Euronext Paris at €63.17, up €0.50, or 0.8%.

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