Antitrust Law Daily Wrap Up, ANTITRUST NEWS: EC will not refer review of cement supplier’s proposed acquisition to Germany, (Jan 6, 2014)
Organizations Mentioned:Cemex Group, Holcim
By Jeffrey May, J.D.
The European Commission (EC) will continue its investigation of global cement supplier Holcim’s proposed acquisition of operations from rival Cemex in western Germany (Cemex West). The EC announced today that it has rejected Germany’s referral request to assess the planned acquisition under its national competition law.
In the proposed transaction, Holcim intends to acquire part of Cemex’ activities in cement, ready-mix concrete, aggregates and cement materials in western Germany and a small number of plants and sites located in France and the Netherlands, according to the EC. Because the geographic scope of the affected cement markets is wider than national, the EC concluded that it could not refer the assessment of the transaction to Germany. The German competition authority or Bundeskartellamt had contended that referral was appropriate because the transaction threatened to affect significantly competition in the cement markets in Northern and Western Germany.
In October, the EC confirmed that the transaction was the subject of an in-depth investigation. At that time, the EC expressed concern that the deal might reduce competition in parts of Germany and Belgium where Cemex West is an actual or potential competitor of Holcim.
The EC’s initial market investigation indicated that the deal might substantially lessen competition in parts of Germany and Belgium where Holcim and Cemex West compete or are well placed to compete. The EC is concerned that the transaction could enable cement producers active in Germany and Belgium to coordinate their market behavior, or facilitate such coordination.
Swiss-based Holcim announced in August a series of transactions with Cemex Group, which is based in Mexico. Holcim disclosed its intention to purchase Cemex operations in the western part of Germany, including one cement plant, two grinding stations, one slag granulator, 22 aggregates locations, and 79 ready-mix plants. The company intends to combine these assets with its existing Northern German operations. This is the transaction that is now subject to the in-depth investigation. A larger deal between the parties involves other markets in Europe as well.
The EC has until March 10, 2014, to decide whether to block the deal.
Companies: Cemex Group, Holcim
News: Antitrust