Brussels, 06/06/2014 (Agence Europe) - Following an in-depth investigation, on Thursday 6 June, the European Commission has, under the EU Merger Regulation, cleared the proposed acquisition of Cemex West by its Swiss rival Holcim. Cemex and Holcim are global suppliers of cement and other building materials. Holcim sells cement, aggregates, asphalt and cement materials in over 70 countries. Cemex West comprises Cemex's activities in grey cement, ready-mix concrete, aggregates and cement materials in western Germany together with a small number of plants and sites located in France and the Netherlands.
On 22 October 2013, the Commission opened an in-depth investigation into concerns that the proposed deal could substantially lessen competition by removing Cemex West as an actual or potential competitor in parts of Germany and in Belgium. The Commission was concerned that the transaction could enable grey cement producers to coordinate their market behaviour, or facilitate such coordination, by potentially removing incentives for competitors to expand in regions where Holcim is strong, such as in Belgium and northern Germany. In addition, the Commission was concerned about the effect of the transaction on competition in the market for granulated blast furnace slag (GBS), a by-product of steel production that is used as a substitute for clinker in the production of cement and, in its ground form, as a substitute for cement in the production of concrete. The Commission was concerned that the transaction could enable the merged entity to raise GBS prices in the absence of a sufficient competitive constraint from the remaining suppliers.
However, the in-depth investigation showed that the merger will face competition from a number of players in the various geographic markets around the parties' grey cement production facilities in Germany, Belgium and north-eastern France. Holcim and Cemex West do not impose significant competitive constraints on each other in those markets. As such the transaction will not lead to the elimination of an important actual or potential competitor to Holcim.
The Commission says the deal was unlikely to result in making any such market coordination easier, more stable or more effective to a degree that would raise competition concerns. (EL)