Camargo Corrêa's ongoing bid for Cimpor must be creating nightmares for Brazil's anti-cartel authorities.
If the takeover goes through, Camargo Corrêa's Brazilian market share will rise from 24% to 37% according to data from the Global Cement Directory 2012. Together with industrial conglomerate Grupo Votorantim, who already own 21% of Cimpor, this share would amount to 72% of the country's total cement capacity.
As covered in this week's Global Cement Weekly #44 Jose Barros Franco, chief executive of Intercement a subsidiary of Camargo Corrêa, has explicitly denied that Camargo had a pre-agreement with Votorantim to split up Cimpor assets. However, he did not rule out a deal in the future to jointly manage the company. This implies that companies representing nearly three-quarters of the Brazilian cement market might be working together to at least some degree!
In October 2011 Camargo Corrêa denied that it was in talks to buyout Cimpor. According to one source at that time, Camargo Corrêa planned to take over Cimpor's operations in Brazil while Votorantim was considering taking assets outside of Brazil. Currently analysts expect the same thing to happen now if the takeover goes through, especially given any possible anti-competitive attention in Brazil.
With operations in four continents Portugal's Cimpor holds 77% of its global capacity outside of Brazil. If the takeover does actually happen, then the key question is this: how much of Cimpor's international operation does Votorantim want in return for helping its competitor Camargo Corrêa to grow back at home in Brazil?