A takeover bid for Cemex Croatia business by two German cement producers faces as EU veto, according to Reuters, on concerns that the deal would reduce competition in the regional cement market.
HeidelbergCement and Schwenk Zement have bid for Cemex Croatia through their jointly-owned subsidiary, Duna Dráva Cement (DDC). DDC is the largest importer of cement into Croatia, while Cemex Croatia is the country’s largest producer.
In a press release on the opening of its investigation of the deal last October, EU Commissioner for Competition, said that the commission needed “to make sure that consolidation does not lead to higher prices for construction companies and ultimately consumers in Croatia.”
In particular, the European Commission (EC) raised concerns about the impact of the deal on the cement market in southern Croatia. An initial investigation indicated that the combination of Cemex Croatia and DDC would “remove a significant competitor from an already concentrated regional market”, resulting in price increases.
An offer by DDC to lease a cement terminal on the Dalmatian coast to a rival producer to address the EC’s competition concerns may not be enough to prevent a veto, Reuters reported.
In December, HeidelbergCement said it was mounting a court challenge to the EC’s authority to review the deal, arguing that it should have been left to the Croatian competition agency. The case will not be heard before the EC’s ruling on the deal is released in April, however.
Read the article online at: https://www.worldcement.com/europe-cis/29032017/takeover-of-cemex-croatia-faces-ec-veto/