EU approves acquisition of Holcim assets by CEMEX

European Commission gives unconditional clearance for proposed transaction in Spain

FOLLOWING an in-depth investigation, the European Commission has unconditionally cleared the proposed acquisition of the Spanish operations of Holcim by CEMEX.

The Holcim assets comprise plants and quarries dedicated to the production and supply of cement, aggregates, ready-mixed concrete and mortar in Spain.

On 23 April 2014, the Commission opened an in-depth investigation over concerns that the proposed transaction could substantially lessen competition in the market for grey cement by removing Holcim assets as an actual competitor in eastern Spain.

The Commission was also concerned that the proposed transaction could facilitate existing co-ordination between grey cement producers in central Spain or make future co-ordination more likely.

However, last week the Commission said that both of these concerns had been dispelled by its in-depth investigation. It concluded that the acquisition would not raise competition concerns since the merged entity will continue to face sufficient competition from its rivals in all markets concerned.

With regard to eastern Spain, the investigation showed that the merged entity will continue to face competition from a number of players in the various geographic markets around the parties’ grey cement production facilities in this region.

With regard to central Spain, the Commission found that while certain features of the grey cement markets under investigation would make them prone to co-ordination, on balance the proposed acquisition was unlikely to result in making any potential co-ordination between grey cement producers in this area easier, more stable or more effective.

The Spanish transaction is linked to two other transactions between Holcim and CEMEX. Through the first, CEMEX intend to acquire control of the whole of Holcim’s activities in cement, ready-mixed concrete and aggregates in the Czech Republic. This operation was cleared by the Czech competition authority in March 2014 following an in-depth review.

In the other linked transaction, Holcim intend to acquire certain assets of CEMEX located in western Germany. The Commission approved this transaction on 5 June 2014 also following an in-depth investigation.

The consummation of the overall transaction is still subject to the negotiation of final binding agreements between the two companies.