Cemex-Holcim’s EU Probe Foreshadows Antitrust Concerns on CementAoife White
Holcim Ltd.'s sale of Spanish assets to Cemex SAB faces an in-depth probe by European Union regulators that foreshadows antitrust concerns over Holcim and Lafarge SA’s plans to form the world’s largest cement maker.
Removing Holcim from the Spanish market “could facilitate coordination” between cement makers, the European Commission said in an e-mailed statement today. Collusion on pricing and customer allocation “could become more effective and sustainable” with fewer rivals that act in a more similar way, regulators said. The EU cited similar concerns over shrinking competition when it started an in-depth investigation into a separate German deal between Holcim and Cemex last year.
Switzerland’s Holcim, the world’s largest cement maker, and France’s Lafarge are planning to sell assets with 5 billion euros ($6.9 billion) in revenue to win regulatory approval for the biggest European deal this year, with two-thirds of the sales from Europe. The transaction is sure to get an extended probe from the EU, Competition Commissioner Joaquin Almunia told reporters earlier this month.
Cemex, the biggest cement maker in the Americas, and Holcim are swapping assets in Europe in a deal that also sees Monterrey, Mexico-based Cemex pay 70 million euros. Holcim, based in Jona, Switzerland is buying Cemex’s German unit and selling Spanish assets to Cemex.
Both Cemex transactions are facing in-depth scrutiny from EU regulators who can require companies to sell off units to eliminate antitrust concerns. The EU said today that it saw possible problems with the grey cement market in parts of Spain. Its initial investigation showed the combined company could “exercise significant influence” on prices for the product.
The Brussels-based commission has a Sept. 5 deadline to decide on the Spanish deal and has a July 8 date to rule on the German acquisition.
Cemex didn’t immediately respond to requests for comment. Peter Stopfer, a Holcim spokesman, declined to speak about the EU decision.