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Competition and Markets Authority stays Lafarge proceedings until April 2015

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World Cement,

In January of this year, the UK Competition and Markets Authority announced a shake-up in the cement industry that would require Lafarge to sell off another cement plant to a new entrant to the UK industry. The news was met with shock by the industry, which had already adjusted to meet earlier demands by the Competition Commission, as was, with the creation of Hope Construction Materials in 2013 and the sale of Lafarge’s Hope cement plant.

Since the original announcement, a bigger shockwave has hit the international cement industry, with the proposal of a merger between Holcim and Lafarge. Aware of the potential for further concern from antitrust authorities in all of its markets, the two companies have announced plans for disposals to reduce its market share in countries where that combined share exceeds an acceptable percentage. Though Holcim does not have a cement plant in the UK, it owns Aggregate Industries, which has a number of construction materials facilities that, stacked up with Lafarge’s cement operations and other construction materials businesses, would no doubt cause further concern for the Competition and Markets Authority. In the list of divestments, Lafarge included its UK operations, with the possible exception of one plant.

Lafarge operates a joint venture with Anglo American in the UK, namely Lafarge Tarmac. In recent months the two companies have announced plans for Lafarge to buy Anglo American out of the joint venture, which will make the business easier to sell. The deal is subject to approval by the competition authorities in the UK and would only go ahead if the Holcim/Lafarge merger is approved.

Lafarge had appealed the Competition and Markets Authority decision that Lafarge must sell another cement plant – an appeal that was set to be heard this month. However, the Competition and Markets Authority has now decided to stay this appeal until April 2015, believing it sensible to wait and see how the Lafarge/Holcim merger pans out.

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