Singapore: Lafarge and Holcim have received approval from the Competition Commission of Singapore (CCS) to merge their businesses in the country.
Holcim (Singapore) and Lafarge Cement Singapore overlap in the manufacture and supply of ready-mix concrete and grey cement. Under Singapore's Competition Act, firms are not allowed to merge if the resulting entity could lead to a substantial lessening of competition in any market. However, Lafarge and Holcim argued that they would not have substantial market power after the merger. Grey cement is also imported to Singapore by Holcim primarily for its own consumption and is supplied to third parties only to a limited extent, they said.
After a public consultation exercise, the CSS issued its decision that 'The transaction is unlikely to lead to substantial competition concerns in Singapore.' This was because the firms are not major players in Singapore, despite being major names in overseas markets. The CSS added, "There is significant localised competition in the relevant overlapping markets in Singapore."
There are also alternative suppliers that can meet any additional demand for ready-mix concrete, thereby limiting the market power of the merged companies. With a number of suppliers in the market, cooperation among firms to raise prices will be harder as well, according to the CSS.
