European Competition Commissioner Joaquin Almunia has told reporters the Lafarge-Holcim merger will likely be subject to a lengthy investigation. "Last week the parties informed us of their intention but with very general information before the operation was known by the media. Now we will receive more detailed information because this should of course be analysed at our level," he said in Athens this week. "Given the size of the two companies, given that they are the two main players in the European market, yes, it's clearly a phase 2 analysis," he added. A phase 2 analysis can take up to four months and is usually opened where the commission has serious concerns about the impact of a deal on consumers.
Competition concerns are likely to arise in 15 countries where both countries do business. When the deal was announced, investment bank UBS warned that it could take two years to pass through all the various regulatory approvals. Existing investigations over antitrust concerns are ongoing in several key markets where the companies operate.
In the UK, Lafarge Tarmac is appealing a decision by the UK Competition and Markets Authority (CMA) to sell one of its cement plants. In its findings, the CMA requires that the plant be sold to a newcomer to the UK industry rather than one of the existing players. Even Hope Construction Materials, the newest entrant to the UK cement industry, having acquired the Hope cement plant and a range of other assets in a deal to satisfy the CMA (then UK Competition Commission)’s original requirements after Lafarge acquired Tarmac Limited from Anglo American, was ruled out as a potential purchaser. Whether or not this also rules the company out of buying up other assets divested in the Lafarge Holcim merger is not yet known. However, Andi Hodgson, Head of Communications and Marketing at Hope Construction Materials, told World Cement: "A Lafarge-Holcim merger would be an interesting development for the industry and could give rise to some good opportunities. Hope Construction Materials is a young, successful and growing business and so I expect we'll be keeping an eye on how things evolve." Meanwhile, reports from Turkey indicate that OYAK Cement is also on the lookout for acquisition opportunities, including in Great Britain.
Written by Katherine Guenioui
Read the article online at: https://www.worldcement.com/europe-cis/11042014/competition_commission_confirms_intensive_lafargeholcim_investigation_38/