The companies are aiming to complete the deal by the first quarter of 2015. Shares in the new company will be listed on stock exchanges in Paris and Zurich.
Founded in Switzerland in 1912, Holcim employs 71,000 people, with production sites in about 70 countries. It reported net sales of 19.7 billion Swiss francs (16.1 billion euros, $22.2 billion) in 2013.
Lafarge began as a French limestone-quarrying company in 1833, and now employs 65,000 people in 64 countries, with annual sales of 15.8 billion euros ($21.7 billion).
In Paris, Lafarge shares ended the day up 2.6% at 65.7 euros, while the CAC 40 ended down 1.1%. Holcim shares rose 1.6% to 81.50 francs while the broader Swiss SMI index gave up 1.2%.
Copyright Agence France-Presse, 2014