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 coordination between grey cement producers in
central Spain or make future coordination more likely. These concerns
have been dispelled by the Commission's in-depth investigation.
As regards eastern Spain, the
in-depth investigation has shown 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. The in-depth investigation has shown that these rivals, most
notably because of the level of their spare cement production capacity,
can be expected to exert a sufficient competitive constraint on the
merged entity.
As regards central Spain, the
Commission found that certain features of the grey cement markets under
investigation make them prone to coordination. However, on balance, the
Commission ultimately concluded that the proposed acquisition was
unlikely to result in making any potential coordination between grey
cement producers in this area easier, more stable or more effective.
Moreover, the Commission also concluded that competitors will not be
more likely to engage in coordination as a result of the proposed
transaction.
The Commission therefore concluded that the transaction would not raise competition concerns.
The transaction was notified to the Commission on 28 February 2014.
Background...
Cemex,
which is headquartered in Mexico, is a global building materials
company active in cement, ready-mix concrete, aggregates and related
building materials.
The Holcim assets
comprise plants and quarries dedicated to the production and supply of
cement, aggregates, ready-mix concrete and mortar in Spain. Holcim,
which is headquartered in Switzerland, is a global supplier of cement,
aggregates, ready-mix concrete as well as asphalt and cementitious
materials with operations in more than 70 countries.
The
Cemex/Holcim assets transaction is linked to two other transactions
between Holcim and Cemex. Through the first related transaction, Cemex
intends to acquire control of the whole of Holcim's activities in
cement, ready-mix concrete and aggregates in the Czech Republic. This
operation was cleared by the Czech competition authority in March 2014
after an in-depth review. In another linked transaction, Holcim intends
to acquire certain assets of Cemex located in western Germany. The
Commission approved that transaction on 5 June 2014 also following an
in-depth investigation (see IP/14/639).
The
Cemex/Holcim assets transaction does not meet the turnover thresholds of
the EU Merger Regulation. However, following a referral request from
Spain, the Commission agreed to assess the transaction related to Spain
(see IP/13/977).
Merger control rules and procedures
The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.
The vast majority of notified mergers
do not pose competition problems and are cleared after a routine review.
From the moment a transaction is notified, the Commission generally has
a total of 25 working days to decide whether to grant approval (Phase
I) or to start an in-depth investigation (Phase II).
Currently,
there are two ongoing phase II merger investigations. The first one
concerns the proposed acquisition of Rockwood's titanium dioxide
business by Huntsman (see IP/14/220)
where the final deadline is 18 September 2014. The second concerns the
acquisition of the Dutch cable operator Ziggo by Liberty Global (IP/14/540) where the final deadline is 3 November 2014.
More information will be available on the competition website, in the Commission's public case register under the case number M.7054.
