Antitrust Law Daily Wrap Up, ANTITRUST NEWS: EC approves CRH’s acquisition of construction materials assets, (Apr 24, 2015)

By Edward L. Puzzo, J.D.

The European Commission has cleared the proposed acquisition of several assets of Switzerland-based Holcim and France-based Lafarge by Ireland-based CRH, the Commission announced today (IP/15/4854). The three firms are global producers of building construction materials.

This action follows the December 15, 2014 approval by the Commission of the acquisition of Lafarge by Holcim, conditioned upon the divestment of certain assets (Case number M.7252). The assets divested by Holcim and Lafarge consist of production facilities of grey and white cement, aggregates, RMX, asphalt, and other construction materials. The facilities are located in France, Germany, United Kingdom, Hungary, Slovakia, and Romania.

CRH's activities overlap with the divested businesses in a number of areas, such as cement, aggregates, ready-mix concrete, and asphalt. As most of these materials are sold within a short distance from the sites where they are manufactured, the Commission focused its assessment on the impact of the merger on customers located near the production facilities of CRH and of the divested assets.

The Commission's investigation focused on the effects of the merger on competition for grey cement in three areas, namely (a) the cross-border region between Poland and Slovakia, (b) the cross-border region between France and Belgium, and (c) the United Kingdom. The Commission also looked at the competitive landscape for ready-mix concrete, cementitious materials, aggregates and asphalt in several regions of the European Area (EEA).

In the United Kingdom, the Commission assessed in particular overlaps in South Wales and Scotland and concluded that the merged entity will continue to face competition from major integrated players, such as Hanson (HeidelbergCement), Cemex, Hope, and LafargeHolcim, as well as from importers.

In France, Belgium, Slovakia, and Poland, the Commission's investigation showed that the increases in market shares are not significant and the merged entity would still face competition from a number of competitors.

Finally, the Commission concluded that the transaction was unlikely to lead to less competition in relation to the production of RMX, cementitious materials, aggregates, and asphalt in local areas across the EEA, because of the presence of alternative suppliers.

The Commission concluded that the transaction would raise no competition concerns, particularly because the merged entity will continue to face sufficiently strong competition after the merger and customers will have alternative suppliers in all markets concerned.

Hotels. Separately, the Commission approved the acquisition of joint control over InterContinental Paris Le Grand Hotel of France by Constellation Hotels Holding Limited S.C.A. of Luxembourg, and InterContinental Hotels Group (IHG) of the United Kingdom (MEX/15/4852).

InterContinental Paris Le Grand Hotel is a four star hotel, located in Paris. Constellation invests in hotels and other real estate. IHG owns, operates, and franchises hotels on a worldwide basis. The Commission concluded that the proposed acquisition would raise no competition concerns, because of its limited impact on the market structure.

The case numbers are M.7550 and M.7444.

Companies: CRH Plc; Holcim AG; Lafarge, SA; Constellation Hotels Holding Limited SCA; InterContinental Hotels Group

News: AcquisitionsMergers Antitrust