Croatia: The European Commission has opened an investigation to check whether the proposed acquisition of Cemex Croatia by HeidelbergCement and Schwenk is in line with the European Union (EU) Merger Regulation. The commission has concerns that the proposed takeover may reduce competition for grey cement in Croatia. It will make its decision by 23 February 2017.
"The construction sector, like any other sector, needs competition. As cement is an essential part of the sector we need to make sure that consolidation does not lead to higher prices for construction companies and ultimately consumers in Croatia," said commissioner Margrethe Vestager.
The commission has concerns regarding the supply of grey cement in southern Croatia, including Dalmatia in particular, where Cemex Croatia operates three cement plants in Split and faces competition from DDC's imports from Bosnia and Herzegovina, which is not an EU member. The proposed transaction would combine Cemex Croatia, the largest producer in the area, and DDC, the largest importer. The commission's initial investigation indicates that the proposed transaction may remove a significant competitor from an already concentrated regional market.
The remaining actual or potential suppliers may exercise only limited competitive pressure on the merged entity because of the transport costs to reach southern Croatia. Additionally, the domestic cement suppliers Cemex Croatia and LafargeHolcim control all the cement terminals in ports along the Croatian coast. The commission has preliminary concerns that the transaction may strengthen the market power of Cemex Croatia in southern Croatia and result in price increases for grey cement.
HeidelbergCement and Schwenk plan to acquire, via their joint subsidiary DDC, assets in Croatia and Hungary that currently belonging to Cemex. The Hungarian part of the transaction as been referred to the Hungarian competition authority, so the commission's investigation will focuses on the acquisition of Cemex's Croatian assets.
