Brazil’s antitrust regulator on Wednesday imposed restrictions on the purchase of minority stakes in the local unit of Portugal’s Cimpor by two rivals in a bid to protect industry competition.
Brazilian rivals Votorantim Cimentos and Camargo Correa Cimentos have acquired 61 per cent of Lisbon-based Cimpor through private agreements since January. That allowed the firms to remain Brazil’s largest and fourth-largest cement makers, respectively, by thwarting steelmaker CSN’s expansion into cement.
In separate accords, Cimpor, Votorantim and Camargo agreed to maintain their structures separate until Brasilia-based regulator Cade rules whether the purchases harm free competition in the domestic cement industry.
Under the agreements, neither Votorantim nor Camargo can use their position as Cimpor shareholders to access strategic information about local operations, Cade said.
"Actions by this entity to preserve competition are necessary until a final ruling is issued because of the size of the players, their relevance in the market and the potential interference" in Cimpor’s decisions, the accord said.
CSN has called the moves by Votorantim and Camargo Correa anti-competitive and filed an antitrust suit in Brazil on Feb 10. Any change in the shareholding structure of Cimpor should be shunned by regulators, CSN said in the suit.
Camargo Correa purchased 31 per cent of Cimpor while Votorantim won control of about 30 per cent.
Cimpor shares closed unchanged at 5.4 euros in Lisbon trading on Wednesday. CSN, led by Brazilian textile heir Benjamin Steinbruch, jumped 1.8 per cent to 61.31 reais.
Both Votorantim and Camargo openly voiced plans to remain minority shareholders – a move that analysts said paved the way for the stake purchases and won over the blessing of the Portuguese government for the deal.
Votorantim controls 40 per cent of Brazil’s cement industry. Demand for building materials in Latin America’s largest economy is surging as the government executes a US$344bn infrastructure investment plan and the country prepares to host the 2014 soccer World Cup and the 2016 Olympics.
CSN’s bid for Cimpor, Brazil’s No 3 cement producer, failed after it pushed forward with a US$5.5bn unsolicited offer for all of the Portuguese company’s shares. Cimpor’s board rejected CSN’s bid twice, saying it failed to reflect the true value of the company.