Hanson and IDB sale cancelled, Israel

Hanson and IDB sale cancelled, Israel
Published: 22 December 2009

Antitrust commissioner Ronit Kan will not approve the sale of building materials firm Hanson Israel to IDB group company Mashab, sources told TheMarker. Indications to this effect have been relayed in recent weeks to Mashab, which has begun exploring ways to get the NIS 450 million sale by Germany’s HeidelbergCement through the Antitrust Authority.

Alternatives under consideration include acquiring only part of Hanson. The Antitrust Authority may have already rejected several options proposed by Mashab. Observers say the authority would accept a greatly scaled-down deal, if such approval were forthcoming at all, but not the whole transaction.

"The transaction in its entirety is being examined by the antitrust commissioner, and we are waiting for her official response," Mashab said. The Antitrust Authority says that "contacts with the parties are continuing," adding that Mashab’s acquisition by Hanson is "highly problematic ... but there is no final decision on the matter."

Hanson specializses in concrete and quarrying, while Mashab owns Nesher, which has been declared a monopoly in Israel in cement production. In addition, the Livnat family, which is a partner in the group that controls IDB, controls interests in related industries including cargo handling for infrastructure companies.

Mashab depicts the deal as a vertical merger in the infrastructure sector, one that would not harm competition. But concerns abound that the transaction would reduce competition in the concrete and infrastructure industries. If Mashab disagrees with the Antitrust Authority’s decision, it is expected to appeal to the Antitrust Tribunal.

The sale of Hanson Israel to Mashab was inked at the end of July after Hanson’s German parent company, HeidelbergCement, considered bids by several suitors. The process included meetings with representatives of the Shapira family’s Shapir Engineering, and with businessmen Ya’akov Shahar and Yaakov Engel. All were ready to buy Hanson, which is considered Israel’s second largest building materials firm.