Brazil antitrust body investigates bid for Cimpor

Brazil antitrust body investigates bid for Cimpor
Published: 27 January 2010

Brazilian antitrust regulator SDE is investigating recent proposals made by local companies for Cimpor, the O Estado de S. Paulo newspaper reported Tuesday.

The Justice Ministry-linked body last week requested new information from Cimpor and its Brazilian suitors Votorantim, Camargo Corrêa and Companhia Siderúrgica Nacional (CSN) as part of an investigation started in 2006 into alleged price-fixing in the domestic cement market.

CSN in December made a hostile €3.86bn takeover bid for Cimpor, corresponding to €5.75 a share. Cimpor’s board earlier in January rejected the bid as too low.

Since then Camargo Corrêa has approached Cimpor with a merger proposal, and Votorantim said that it was studying the possibility of buying a stake in the Portuguese firm.

In a statement Monday, SDE said it has requested further information on a suspicion that local companies are acting "to prevent the entry of new competitors" into the Brazilian market.

CSN, a giant steel producer that has recently inaugurated its first cement plant, has a small market share in the sector. With Cimpor, CSN would also become a relevant player in cement, O Estado said.